Loading...
HomeMy WebLinkAbout2014-05-20 Agenda and Support Documentation Town Council Evening SessionNOTE 2 3 4 5 VAIL TOWN COUNCIL EVENING SESSION AGENDA VAIL TOWN COUNCIL CHAMBERS 75 S. Frontage Road W. Vail, CO 81657 6:00 P.M., MAY 20, 2014 TOWN OF VAIN Times of items are approximate, subject to change, and cannot be relied upon to determine at what time Council will consider an item. ITEM /TOPIC: 2014 Youth Recognition Awards (5 min.) PRESENTER(S): Ludwig Kurz BACKGROUND: The purpose of the award is to recognize and reinforce outstanding achievement by youth of the Upper Eagle Valley, both for their individual achievements and as role models for their peers. The Vail Town Council created this award to acknowledge and reward students from our community schools. In addition to being recognized by a member of the town council at their respective awards evening, the recipients are given a $1000 scholarship. This year's recipients are: Eva Hutchinson — Battle Mountain High School and Anthony "Clay" Kirwood — Vail Mountain School. ITEM /TOPIC: Citizen Participation (10 min.) ITEM /TOPIC: Consent Agenda: 1) Easement Vacation at 2754 Snowberry Drive - Tom Kassmel (5 min. ) ITEM /TOPIC: Town Managers Report 1) Eagle Air Alliance Request (5 min. ) ITEM /TOPIC: Town Council update regarding the outcome of the April 24 neighborhood planning meeting for Booth Creek Park. (30 min.) PRESENTER(S): Todd Oppenheimer ACTION REQUESTED OF COUNCIL: Town council is requested to provide staff with direction on the following items: 1. Overall approach to the design of the park. 2. Preliminary list of park elements to include in the design. 3. Continuation of the park design process. BACKGROUND: This update is provided in order to identify the specific feedback received from the neighborhood so that final decisions can be made about improvements to the park. STAFF RECOMMENDATION: Staff recommends incorporating the recent neighborhood suggestions into the park improvements such as: 1) single tennis court, 2) half court basketball, 3) artist inspired natural playground, 3) restrooms, 4) picnic shel1%i?P&PPr4formal amphitheater space, etc. Additional items to be included will be reviewed as well as a list of items that were not supported as park improvements. 6. ITEM /TOPIC: A presentation of the Draft Market Analysis - Chamonix For - Sale Housing Study. The presentation will include a summary of the purpose of the study, an overview of the current master plan for the site, a locational analysis, area demographic and economic information, a rental market overview, a summary of current market conditions and demand estimates, a competitive analysis, and information on mortgage availability. The presentation will conclude with a series of conclusions and recommendations for the Town Council's consideration based upon the information contained within the study. (30 min.) PRESENTER(S): George Ruther, Director, Community Development and Melanie Rees, Principal, Rees Consulting, Inc. ACTION REQUESTED OF COUNCIL: Listen to the presentation and provide initial feedback and comment in preparation for the completion of the final document. BACKGROUND: The Town of Vail acquired the Chamonix Parcel with the expressed intent of developing deed restricted housing on the site. To that end, a master plan for the development of the site has been completed and adopted by the Town Council and previous market studies have been prepared. In January of 2014, the Vail Town Council instructed staff to coordinate the completion of an update market study for the Chamonix Parcel. The updated study is to be used to guide future decision making with regard to the potential for development on the site. STAFF RECOMMENDATION: As this is a worksession to present the draft Market Analysis, staff does not have a recommendation at this time. 7. ITEM /TOPIC: Request for additional antenna system nodes from Crown Castle International (20 min.) PRESENTER(S): Ron Braden, Gannon Sutter, Tanya Friese, Crown Castle International BACKGROUND: The Town is currently under contract with Crown Castle International to upgrade the fiber optic based cellular distributed antenna system (DAS). There is a request from Crown Castle to now add six more nodes in order to accommodate coverage for three carriers, AT &T, Sprint and Verizon. The result of this request should be improved signals in certain areas of Vail. 8. ITEM /TOPIC: Second reading of Ordinance No. 11, Series of 2014, an ordinance repealing and reenacting the approved development plan for Phase III of Special Development District No. 6, Vail Village Inn, pursuant to Section 12- 9A -10, Amendment Procedures, Vail Town Code, to allow for an increase in gross residential floor area to facilitate additions to existing dwelling units, located at 100 East Meadow Units 501 and 502 (Vail Village Inn, Phase III) /Lot O, Block 5D, Vail Village Filing 1, and setting forth details in regard thereto. (PEC130046) (10 min.) PRESENTER(S): Jonathan Spence 5/20/2014 ACTION REQUESTED OF COUNCIL: The Vail Town Council shall approve, approve with modifications, or deny Ordinance No. 11, Series of 2014, upon second reading. BACKGROUND: On March 24, 2014, the Planning and Environmental Commission reviewed the proposal to add approximately 792 square feet of GRFA to Units 501 and 502 of Vail Village Inn, Phase III. The Commission offered comments on the proposal with regard to the need to evaluate the proposal pursuant to the criteria, the new roof elements and the need to tie the south roof element to the balcony below. The Commission, at the applicant's request, tabled the item to April 14, 2014. On April 14, 2014, the Planning and Environmental Commission held a public hearing on the request for a recommendation on a major amendment to add GRFA to Units 501 and 502. The Commission forwarded a recommend of approval, with conditions, to the Vail Town Council for a major amendment to SDD No.6, Vail Village Inn, to increase the allowable GRFA for Phase III, with a vote of 7 -0 -0. This recommendation was based upon the review of the criteria outlined in the April 14, 2014 memorandum to the Planning and Environmental Commission, and the evidence and testimony presented. STAFF RECOMMENDATION: The Planning and Environmental Commission recommends the Vail Town Council approves Ordinance No. 11, Series of 2014, upon second reading. 9. ITEM /TOPIC: Adjournment (Estimated 8:00 p.m.) 5/20/2014 rowx of vn' i[> VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: 2014 Youth Recognition Awards PRESENTER(S): Ludwig Kurz BACKGROUND: The purpose of the award is to recognize and reinforce outstanding achievement by youth of the Upper Eagle Valley, both for their individual achievements and as role models for their peers. The Vail Town Council created this award to acknowledge and reward students from our community schools. In addition to being recognized by a member of the town council at their respective awards evening, the recipients are given a $1000 scholarship. This year's recipients are: Eva Hutchinson — Battle Mountain High School and Anthony "Clay" Kirwood — Vail Mountain School. ATTACHMENTS: Vail Youth Recognition Awards 5/20/2014 TOWN OF 75 South Frontage Road West Vail, Colorado 81657 vailgov.com May 20th, 2014 Dear Anthony, Congratulationsl AML111111 C VAIL• BEAVER ��{{EC Town Council 970.479.2106 970.479.2157 fax It Is a tremendous pleasure to be able to announce that you are the Vail Mountain School recipient of the Town of Vail's Youth Recognition Award. The purpose of this award is to recognize and reinforce outstanding achievement by youth of the Upper Eagle Valley; both for their individual achievements and as role models for their peers. You most certainly exemplify the criteria used as a basis for this award. I am pleased to inform you that this Youth Recognition Award also carries with it a $1000 scholarship. Again, congratulations on your award Sincerely, 0 N O Andrew P. Daly LO Mayor, Town of Vail TOWN OF 75 South Frontage Road West Vail, Colorado 81657 vailgov.com May 20th, 2014 Dear Eva, Congratulationsl 2*w Town Council 970.479.29 06 970.479.2157 fax It is a tremendous pleasure to be able to announce that you are the Battle Mountain High School recipient of the Town of Vail's Youth Recognition Award. The purpose of this award is to recognize and reinforce outstanding achievement by youth of the Upper Eagle Valley; both for their individual achievements and as role models for their peers. You most certainly exemplify the criteria used as a basis for this award. I am pleased to inform you that this Youth Recognition Award also carves with it a $1000 scholarship. Again, congratulations on your award. Sincerely, 0 N O Andre7P.Dal LO MayorVail VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: Citizen Participation 5/20/2014 TOWN Of vn' iL1 VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: Consent Agenda: 1) Easement Vacation at 2754 Snowberry Drive - Tom Kassmel ATTACHMENTS: Easement Vacation at 2754 Snowberry Drive 5/20/2014 TOWN Of vn' iL1 0 rowN of vain Memorandum To: Town Council From: Public Works Department Date: 5/14/14 Subject: Easement Vacation at 2754 Snowberry Drive I. BACKGROUND AND SUMMARY Snowberry Drive in West Vail currently has a typical 50' wide road Right of Way (ROW) plus an additional existing 15' wide Roadway, Parking and Utility Easement adjacent and parallel to the road ROW along both the north and south sides of the road, effectively providing an 80' road ROW. This wide ROW and easement has added an additional burden to many of the steep lots remaining along Snowberry Drive, making these lots difficult to develop. One such lot is at 2754 Snowberry Drive. This lot is somewhat unique as it is the last residential lot at the east end of the existing Snowberry Drive paved cul -de -sac and it is also adjacent to the existing ERWSD gravel access road which goes to the water tank above. The ROW in this area actually continues further east along this gravel access road for some distance, however the public paved road was never built any further nor is there any current plans to do so, due to the extremely steep slopes in this area. The owner of the lot is requesting to vacate the existing Roadway, Parking and Utility Easement along this lot line in order to accommodate the development of this lot (see attached request letter and exhibits). Currently the Town has no use for this easement as it is well above the existing public paved road. Nor do we necessarily see a need for it in the future even if the Town were to extend the public paved road further to the east some day. II. STAFF RECOMMENDATION It is staffs' understanding that the lot owner is also currently working with the applicable utility companies in order to vacate this easement. Staff therefore recommends that the Town Council agrees to vacate this portion of the Roadway, Parking and Utility Easement with the condition that all other applicable utility agencies also agree to vacate the easement. 5/20/2014 May 14, 2014 Vail Town Council Town of Vail 75 South Frontage Road Vail, CO 81656 INTENTION ARCHITECTURE 53 red barn edwards, CO 81632 (970) 306 -6612 seth@intentionarchitecture.com intentionarchitecture.com RE: Easement Vacation for 2754 Snowberry Drive /Lot 15, Block 9, Vail Intermountain Subdivision Dear Vail Town Concil, Please accept this letter as a request to formally vacate the roadway, parking and utility easement located at the front property line of 2754 Snowberry Drive. The owner, Michael Dantas, is proposing to construct a duplex on an existing platted lot located in the Intermountain neighborhood. This lot is the last residential lot on this block along Snowberry Drive right -of -way. While the home fronts on the road right -of -way, the roadway that should serve this lot was never completed. Currently there is a steep dirt access road within the Town's right -of -way that provides access to the Eagle River Water and Sanitation District water tank located to the immediate east of this property. The current Roadway, Parking, and Utility Easement is recorded as Reception #121108. We are requesting the easement vacation for the following reasons: 1. The front property line, and subsequent easements and building setbacks were located with the assumption that Snowberry Drive would be constructed several hundred feet further to the east. Currently the easement is located far away from the edge of the road and serves no practical purpose; 2. We have verified, with utility company records and physical locates, that no utilities currently exist in the property, nor do any of the utilities have any designs to use said easement. We are currently in the process of obtaining written confirmation of this; 3. No residential properties exist to the immediate east of the property - this property is owned by Eagle River Water and Sanitation District; 4. We are not aware of any plans to extend Snowberry Drive beyond its current terminus; 5. Vacating the easement will not compromise the abilities of the utilities to provide service to this home; 6. Due to the nature of the extremely steep hillside, access and parking is unreasonably challenging; vacating the easement puts substantially less financial burden on the applicant; 7. We do not believe this easement vacation compromises the adjacent neighbors negatively in any way, nor does it grant any special privilege inconsistent with the limitations on other properties classified in the same zone district. Please see the attached drawing. Thank you for your consideration. Sincerely yours, Seth Bossung 5/20/2014 AA 5 ) J L L 2 3 's ) J E cz i cz w a) � W `~ U U O O cz 0 •i O (n cz O O 0 U i O cz � ,O c cz Q } c cz :3 cz O U co 0- co cz cz O rr AA 5 ) J L L 2 3 's ) J LL > can 0 -a 0- Ir 0 W J W =-, -9 Anil -%a_ ON f�.r7 :Y. t r, ot �- .V lilt! �' r +. ■, e. � 7 'R� Lit l �. � _x ' Q i i 0 M ,;:I- LO r- (\j Q 0 Q U-0 U O 0 O O Q � U U 0- 0 0 J fn � \ \ z LL \ \: ` \ \ \ OZ LL LL, Ili LLI w LLI z. > \ LLI \2 0 ;: yv v v•v � vy\ v v I \z< \ \ \ \ z LL 0 fl z \ \ fl\ Lu o o w \ \ `\ \` w \ . LL co �I �Ul 00� O� LLI LL 19 LU LLI n O w flL z 'U < \ z zC', VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: Town Managers Report 1) Eagle Air Alliance Request ATTACHMENTS: Eagle Air Alliance Request 5/20/2014 TOWN Of vn' iL1 EGE Air Alliance 2014 First - Quarter Executive Summary Overview The Eagle Air Alliance is a public /private partnership consisting of organizations ranging from municipal stakeholders to resort lodging properties to small business supporters, each of whom recognizes the importance of air service to our economy. The mission of the Alliance is to help create a vibrant flight program at the Eagle County Regional Airport. Fundraising Business community fundraising efforts are ongoing, with a goal of 100 -plus private business contributors (up from approximately 20 in 2012 and 65 in 2013). Municipal support from Gypsum, Avon and Vail increased (as did Beaver Creek Resort Company) from prior years. Eagle County also increased their financial support to the Alliance in 2014. Summer Flight Schedule Houston — 3x week non -stop flights June 26- August 18 Dallas — 1 daily non -stop flight June 11 — Sept 30 Dallas — 1 additional Saturday non -stop flight June 14 -Aug 16 Marketing A comprehensive marketing campaign is in place to promote summer service to EGE, primarily aimed at supporting the Houston service. This includes baggage tags for guests flying Houston & Newark in the winter, summer flight banners at EGE during the winter months, direct mailing to Eagle County second homeowners, outdoor billboards in Houston, United.com web banners, United Mileage Plus auction packages and additional marketing support from Vail Resorts, Vail Local Marketing District, Beaver Creek and Eagle County Airport. Long -Term Funding The Alliance has spent much time researching a long -term funding mechanism, including a community phone survey to gauge public awareness and possible support of the air program. The Alliance is currently exploring several possibilities that could provide sustained revenues that can be used to attract additional flights to the Eagle County Regional Airport. Next Steps The EGE Air Alliance would like to request a meeting with staff and town council representatives from Vail to discuss matters related to long -term funding solutions and possible implementation efforts. Please contact Board Chair Michael Brown at (970) 390 -2759, or Vail Valley Partnership Executive Director Chris Romer at (970) 477 -4016, to arrange a meeting and presentation. 5/20/2014 5/20/2014 rowx of vn' i[> VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: Town Council update regarding the outcome of the April 24 neighborhood planning meeting for Booth Creek Park. PRESENTER(S): Todd Oppenheimer ACTION REQUESTED OF COUNCIL: Town council is requested to provide staff with direction on the following items: 1. Overall approach to the design of the park. 2. Preliminary list of park elements to include in the design. 3. Continuation of the park design process. BACKGROUND: This update is provided in order to identify the specific feedback received from the neighborhood so that final decisions can be made about improvements to the park. STAFF RECOMMENDATION: Staff recommends incorporating the recent neighborhood suggestions into the park improvements such as: 1) single tennis court, 2) half court basketball, 3) artist inspired natural playground, 3) restrooms, 4) picnic shelter, 5) informal amphitheater space, etc. Additional items to be included will be reviewed as well as a list of items that were not supported as park improvements. ATTACHMENTS: Memo to the Town Council Letter to Booth Creek Park Neighborhood 5/20/2014 01 rowN of vain Memorandum To: Vail Town Council From: Department of Public Works Date: May 20, 2014 Subject: Booth Creek Park Neighborhood Input Background: The first neighborhood planning meeting for Booth Creek Park was held on April 24, 2014 at the Vail Mountain School. Approximately 35 people from the neighborhood were in attendance. Staff presented the 5 Park Options which had been previously reviewed by the Council on April 1, 2014. These Options include the following: • Option 1 — Upgrade Existing Park • Option 2 — Traditional Park • Option 3 — Sport Courts • Option 4 — Pickleball • Option 6 — Nature Walk Following the presentation, the public was asked to comment on their likes and dislikes in regards to the various options and to provide specific feedback regarding what features are desirable for inclusion in the park. There was considerable discussion and positive interaction between those in attendance. Without question the neighborhood is very pleased to be involved in the planning process for the redevelopment of Booth Creek Park. In addition to the comments received at the neighborhood planning meeting several people sent emails in response to the 5 Park Options posted on the Town website. All the comments received were compiled and reiterated to the public in the attached letter dated April 25, 2014. Summary of Neighborhood Input: The following narrative is a summary of the comments as they are organized in the attached letter. These comments, along with the direction from the Council, will form the basis for the next iteration of park designs. Park Options: People were not asked to choose one option over another but were instead asked to state what they liked and disliked about all the options. Comments regarding the 5 Park Options do not indicate a strong leader. Option 5, Skate Park was not displayed. The comment on Option 5 is probably directed toward Option 6, Nature Walk. There are 3 comments regarding the individual options, of the 7 received, which mention open space, quiet and natural, and blending into the environment. Tennis, Pickleball and other Sport Courts: More people are in favor of tennis at the park than are opposed. A single tennis court versus a double court does not seem to be out of the question. According to the Vail Recreation District staff there is no shortage of tennis facilities in town. There are available tennis courts at Ford Park and Golden Peak every afternoon. The request to include tennis at Booth Creek Park is for the convenience of a free, walk -to tennis court in the neighborhood rather than based on demand. 5/20/2014 There appears to be demand for pickleball courts. Pickleball has been around since the 1960's but has recently become more popular due to the low impact nature of the game. Opposition to pickleball mainly involves a noise issue. Interstate 70 noise in the Booth Creek Park neighborhood was not modeled in the last noise study because the sound berms were already under construction. Similar sites experience 1 -70 noise levels between 65 and 67 dBA when modeled under peak traffic conditions. Noise levels will be lower when traffic conditions are below peak levels. The noise generated by pickleball has been studied. There are on -going law suites relative to pickleball noise in the state of Arizona between property owners and property managers. One study lists the average noise of pickleball being played at 60 dBA while tennis averages 58 dBA. With no appreciable difference in the level of noise the opposition relates to the pitch of the sound. Tennis involves striking a soft, air - filled ball with a strung racket at high speed. The resulting sound is somewhat low pitched and hollow. Pickleball involves striking a hard plastic ball with a hard wood, graphite or aluminum paddle at a somewhat lower speed. The resulting higher pitched ping seems to be the sound that some people find obtrusive. Pickleball is also a social sport with a considerable amount of cheering and a little "trash talking" being part of the game. One community in Arizona has created a list of acceptable and unacceptable pickleball paddles to help alleviate some of the noise concern. Comments regarding courts also included some desire for a rebound wall, basketball, horseshoes and bocce ball. Noise was again a concern regarding a rebound wall. This noise can be easily mitigated by orientating a wall away from the residential areas. Playground: The inclusion of a playground in Booth Creek Park seems to be a given. Only one negative comment regarding spending money on a playground was received. The majority of the discussion focused on natural materials, climbing, types of equipment, and the inclusion of art. Additional comments received were in reference to a need for park elements intended for youth who may not be interested in traditional playground equipment. There was some interest in a fitness /exercise course in addition to a playground element. These types of equipment are increasing in popularity and are not currently represented in the town's park system. Picnic Shelter and Restrooms: Most people were in favor of including a picnic shelter and a 2 -stall restroom facility in the park design. This is consistent with all other neighborhood parks which include a playground area. The location of the restroom in proximity to the playground and away from the residential properties is an important consideration. Parking: There was one comment received that suggests a neighborhood park should not include parking. Experience and observations suggests people frequently drive to parks outside of their neighborhood and require parking. The number of spaces required depends on the features and activities included in the park. The previously identified National Recreation and Park Association parking standard will be used to guide the recommended number of spaces. The number of spaces will probably be somewhere between 8 and 12 spaces wit the final decision being established by the PEC. Vehicular access to Booth Creek Park will need to be established from Manns Ranch Road. CDOT will not allow access from the North Frontage Road since there is opportunity for Town of Vail 5/20/2014 Page 2 access from a local street. There is some opposition to on -site parking in the vicinity of adjacent residential properties. Suggestions were made for on- street parallel parking spaces similar to Bighorn Park and to investigate on -site parking closer to the intersection of Bald Mountain Road. Initial studies indicate that on -site parking may be possible where the existing playground is located. Town of Vail Development Standards allow for public parking within the right -of -way. Planning and Architectural Standards for the Vail Thirteenth Filing subdivision require all parking areas to be screened from view from neighboring properties. Pedestrian Paths: A looped, paved pathway for kids on bikes, scooters and rollerblades is desirable in the park. A combination of hard surface and soft surface paths with some nature interpretation signs was suggested. There was some interest in an interpretive nature trail through the Booth Creek riparian area. The Vail Mountain School staff expressed interest in involving the students in a possible interpretive trail as a science project. The feasibility of a bridge crossing Booth Creek has not been determined and will need to be examined in detail if that concept is to be advanced. Other suggestions: Other suggestions from the neighborhood include park elements such as a beach along Booth Creek, a sledding hill, mini skate park, horseshoes, tetherball, and "hit away" poles for practicing softball batting swing. One suggestion that was omitted from the April 25 letter was from the VMS staff and included a small lecture /amphitheater area that could be used as an outdoor class room or small performance space. Some of these suggestions are probably not appropriate for this park while others are easy to incorporate into an overall park design and can be explored as further options are developed. Conclusions: There are two possible philosophical approaches the Council could take in selecting the design for Booth Creek Park. The first is a direct response to the neighborhood input as the primary users of the facility. In this approach the town -wide park system and community demand is considered to a lesser degree than those of the neighborhood. This approach acknowledges Booth Creek Park as a public space dedicated to the town by the developer and intended to serve the needs of the neighborhood. The second approach is a park system -wide approach looking to fill demand for recreation activities that are currently under provided in the community. In this approach the neighborhood desires are considered however the larger needs of the community are equally important. Recommendation: Staff recommends the Council select the approach that favors the neighborhood in the design of Booth Creek Park. The property was dedicated to the town for the benefit of the neighborhood and the small, 3 acre site does not lend itself to fulfilling community park needs. Staff recommends the Council consider the following lists for elements to include and to discard in subsequent options for the development of the park. On the 3 acre Booth Creek Park site additional prioritization of included park elements may be required to avoid over - development and possibly exceeding budget allocations. Elements to Include: • Single tennis court. • Half court basketball /multiuse court with a rebound wall. • Artist inspired, natural playground. Town of Vail 5/20/2014 Page 3 • 2- stall, 3 season public restroom. • Picnic shelter. • Small informal amphitheater space. • Paved pedestrian path, looped through the park. • Soft surface interpretative nature trail through Tract B. • Limited number of fitness course equipment. • Other small elements such as horseshoes, tether ball etc. • On- street parallel parking. Elements to Discard: • Pickleball courts. • Bridge crossing Booth Creek. • Modifications to Booth Creek streambanks. • On -site parking. • Skate park. Request to Council: Staff request the Council consider the neighborhood comments received to date and accept, modify or deny the staff recommendation for the approach and included elements for Booth Creek Park. Council is also requested to direct staff to develop additional park design options, facilitate additional neighborhood meetings, and begin the submittal process for the town development approval process. Town of Vail 5/20/2014 Page 4 TOWN OF 0 VAIL 1309 Elkhorn Drive Vail, Colorado 81657 vailgov.com April 25, 2014 Dear Booth Creek Park Neighbors, Public Works /Transportation Department 970.479.2158 970.479.2166 fax We're off to a great start in planning the remodel of Booth Creek Park! Thank you for your participation either by attending our kick off meeting or by forwarding your comments and suggestions in advance. As your landscape architect, I'm excited to be working with you to arrive at a design for the park that will make us all proud. We came away from the meeting with pages of notes on your ideas and comments. Obviously, with only 3 acres of space in the park, and because of considerable amounts of existing vegetation and the restrictive zoning along the creek, we will need to prioritize the features to be included in the park's design. Following is a compilation of the notes made at the meeting and emails I received and posted. I've organized the comments into general categories to help us all digest them. Park Options: • Option 2 with nature walk (with bridge if possible) seems awesome. • Something along the lines of proposal #5 — open space. Perhaps without the bridge and leaving the creek in it's wild state. • Something along the lines of proposal #1 with a two court (tennis) facility in the southern quadrant, with one of them being a multi -use court and a turf field in the northern quadrant. • Like option #3 but would like shelter with roof and picnic tables. • 1 like all the options but would love to keep tennis. Go for quiet and natural and best place in town to learn to bike and skate, etc. As far as the design goes, please consider something that blends into the environment... something more along the lines of Donovan Park... Red Sandstone Park uses unnatural colors and this is not something I prefer to see in our neighborhood. Sports: • Include courts (tennis, bocce, possibly horseshoes as well). • Pickleball lines can be painted in yellow on the tennis court which will save space and budget. • 1 would really like to see both courts replaced, with a wall to practice hitting on. • ...would like to ask if it would be at all possible to include hard true tennis courts rather than asphalt courts. • ... my two cents is that it's a waste of space and maintenance to have tennis /pickleball in such a small park. 5/20/2014 • 1 love the idea of a tennis court or two — free courts are not an option anywhere else are they? • Pickleball noted as "wildly popular" and "growing rapidly." This is a neighborhood park and that kind of traffic and demand does not belong here. • Pickleball if there is a shortage, better than concrete tennis court. • No "thumping" rebound boards. • Wall ball desired. • Would demand allow one tennis court and /or one pickleball court? • Concerns regarding noise pollution of pickleball court. • Basketball court desired. • A Basketball court would be fun for the older kids /adults. • Pull (obtain) sound studies (to compare with pickleball noise levels). Playground: • Big spiral slide desired. • Wooden play structures. • Push merry-go- round. • Rainbow slide. • Climbing wall. • Art in playground. • Big rock (natural boulder) for kids to climb on. • 1 opine that since we have other playground features (sandstone, pirateship, etc.) that we don't need to spend too heavy on that aspect, just my two cents. • Rock features for kids to climb on near the playground... Restrooms and Shelter: • a picnic table /shelter and restroom /drinking fountain must be located near playground — all preferred in the SW quadrant. • It would be great to have a grassy /BBQ area with bathroom for picnics and neighborhood gatherings. • Love the inclusion of picnic table and shelter, I think that's smart. • Bathrooms NEAR play facility (kids). • Bathroom near playground. • 2 sided (male /female) restroom. • Shelter with roof and covered picnic tables (in addition to option #3). • 2 stall restroom, drinking fountain, picnic shelter (not sure if a grill gets used, but if it's in the budget, add it! Parking: • As many parking spaces off street as possible. • Revisit on- street parking. • 8 parking spots (save space). • What are the plans for parking? • We would prefer on- street parking (like at Bighorn Park) vs. the pull in parking spaces in the NW quadrant. Finding another solution that would put parking in the southern part of the park, or even across the street south of Bald Mountain Road, would be preferable. Paths and Walkways: • Definitely the nature walk and include: 1) path includes signage identifying varieties of plants and flowers, 2) second bridge to the north. Town of Vail 5/20/2014 Page 2 • ... and if we had space for a paved track around the park for roller blading, scooters, bikes, etc... that would be nice too. • Combine natural and hard surface trails. • Soft surface paths. • Path around park for kids /bikes. • Bike friendly. More Ideas: • Definitely wading pool /beach similar to that of Gore Creek Promenade (preferably near the new north bridge or the playground, so as to keep an eye on the kids. • Include a grade for sledding hill near the parking lot. • 500 square foot mini -skate park. A feature for beginners to help kids get started. Below link is larger than what I envision but shows what can be done. http: / /alloveralbanV.com/ images / Plans %20for %20Chatam %20skatepark.lpq • Horseshoes are always fun ... tetherball (doesn't take up much room). • I've noticed certain types of facilities seem to be utilized and enjoyed while others sit idle and don't seem to be of interest to park goers. In particular, I've noticed that parks with outdoor fitness equipment seem to routinely be utilized by park goers of all ages. I've seen a recent shift from kids only equipment, such as swings and slides, to equipment appropriate for all ages. These types of facilities seem to be a big attraction. I've taken the liberty of including links that may give you some idea of what's available. http: / /thumb7.shutterstock.com /display Pic with logo/668929/134887859/stock-photo- tel-aviv-nov-israeli- people -in -a- public- fitness - park -on- november- in -tel -aviv- beach- 134887859. i pg https://www.youtube.com/watch?v=Zkwr7Cpq5eo&noredirect=l http://www.tqoqc.com/ • 1 love the idea of horseshoes... • What about the inclusion of tetherball "hit away" type fixed poles? ... softball swing practice apparatus and they could be unobtrusive, peripheral features (low cost/high concept). You tube video attached http: / /www.youtube.com /watch ?v= Y- TAJowYPP4. Whew! That is a lot of information. The next step will occur on May 20, 2014 at the evening Town Council session. I will present the information contained in this letter along with a couple more options for discussion, comment and direction from the Council. The Council will be inviting public comment during this evening session. Please attend if you are available to take part in this discussion. You may also contact the Council in advance of the meeting by emailing towncouncil(a)vailgov.com. Thanks again for being involved in the design of your neighborhood park. I look forward to additional conversations with you throughout our planning process. Sincerely, Todd Oppenheimer Landscape Architect/Capital Project Manager Town of Vail 5/20/2014 Page 3 rowx of vn' i[> VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: A presentation of the Draft Market Analysis - Chamonix For -Sale Housing Study. The presentation will include a summary of the purpose of the study, an overview of the current master plan for the site, a locational analysis, area demographic and economic information, a rental market overview, a summary of current market conditions and demand estimates, a competitive analysis, and information on mortgage availability. The presentation will conclude with a series of conclusions and recommendations for the Town Council's consideration based upon the information contained within the study. PRESENTER(S): George Ruther, Director, Community Development and Melanie Rees, Principal, Rees Consulting, Inc. ACTION REQUESTED OF COUNCIL: Listen to the presentation and provide initial feedback and comment in preparation for the completion of the final document. BACKGROUND: The Town of Vail acquired the Chamonix Parcel with the expressed intent of developing deed restricted housing on the site. To that end, a master plan for the development of the site has been completed and adopted by the Town Council and previous market studies have been prepared. In January of 2014, the Vail Town Council instructed staff to coordinate the completion of an update market study for the Chamonix Parcel. The updated study is to be used to guide future decision making with regard to the potential for development on the site. STAFF RECOMMENDATION: As this is a worksession to present the draft Market Analysis, staff does not have a recommendation at this time. ATTACHMENTS: Chamonix Housing Market Study 5/20/2014 5/20/2014 Contents Introduction................................................................................................. ............................... 1 Purposeof the Study ............................................................................... ............................... 1 Organization of the Report ....................................................................... ............................... 1 Methodology and Sources ....................................................................... ............................... 1 AreaCovered .......................................................................................... ............................... 2 1. Master Plan Summary ...................................................................... ............................... 3 Number, Type and Size of Units .............................................................. ............................... 3 Income Targeting and Prices ................................................................... ............................... 4 Amenities................................................................................................ ............................... 4 SitePlan .................................................................................................. ............................... 5 Access and Infrastructure ........................................................................ ............................... 5 Potential Market Impediments ................................................................. ............................... 5 II. Location Analysis ................................................................................. ............................... 6 Street Address /Street Boundaries ........................................................... ............................... 6 SurroundingLand Use ............................................................................. ............................... 6 Proximityto Services ............................................................................... ............................... 9 Shoppingand Dining ............................................................................ ............................... 9 PublicTransit ....................................................................................... ............................... 9 Bike and Pedestrian Access ................................................................ ............................... 9 Parks................................................................................................... ............................... 9 Schools................................................................................................. .............................10 Marketabilityof the Site ............................................................................ .............................10 III. Demographic and Economic Framework ........................................... .............................12 Market Area Demographics ...................................................................... .............................12 DemographicTrends ................................................................................ .............................14 TheEconomy ........................................................................................... .............................16 IV. Rental Market Overview .................................................................... .............................19 ApartmentInventory ................................................................................. .............................19 OccupancyLevels .................................................................................... .............................20 Rents........................................................................................................ .............................21 Condominium/Townhome Rentals ............................................................ .............................22 V. Ownership Market Conditions ............................................................... .............................24 County -Wide Ownership Market Trends ................................................... .............................24 PriceVariation by Area ............................................................................. .............................26 Availability of Market Housing ................................................................... .............................27 5/20/2014 Sales of Deed Restricted Units ................................................................. .............................29 Availability of Deed Restricted Housing .................................................... .............................30 LotSales .................................................................................................. .............................31 Foreclosures............................................................................................. .............................31 VI. Competitive Analysis ......................................................................... .............................32 Vail Deed Restricted Inventory ................................................................. .............................32 Amenities /Design Features ....................................................................... .............................37 VII. Demand Estimates ............................................................................ .............................39 MarketSegmentation ............................................................................... .............................39 MarketSize .............................................................................................. .............................42 DemandEstimate ..................................................................................... .............................43 Lottery/Buyer Applicants ........................................................................... .............................44 VIII. Mortgage Availability ......................................................................... .............................45 LoanProducts .......................................................................................... .............................45 Deed Restriction Limitations ..................................................................... .............................45 Lending on Condominiums ....................................................................... .............................46 LeasedLand ............................................................................................. .............................46 ARM' s ....................................................................................................... .............................46 The Impacts of Interest Rates on Affordability .......................................... .............................47 Down Payment Assistance ....................................................................... .............................47 BorrowerProfile ........................................................................................ .............................47 IX. Conclusions and Recommendations ................................................. .............................48 Competition.............................................................................................. .............................49 FamilyOrientation .................................................................................... .............................50 Income Targets and Pricing ...................................................................... .............................50 Unit Size, Type and Bedroom Mix ............................................................ .............................51 MortgageAvailability ................................................................................ .............................52 Marketing................................................................................................. .............................53 Amenities /Design Features ....................................................................... .............................53 Phasing.................................................................................................... .............................53 5/20/2014 Draft 4 -3 -14 Introduction Purpose of the Study The Town of Vail contracted with Rees Consulting, Inc. to analyze the market for Chamonix, a proposed employee housing development. As envisioned, Chamonix will provide 58 units of deed restricted ownership housing, ranging from two - bedroom flats to three - bedroom duplexes serving households with incomes from 60% of the Area Median Income (AMI) to 120% or possibly 140% AMI. The 3.6 -acre Chamonix site just north of the west Vail 1 -70 interchange was acquired by the Town in 2005. The original master plan for Chamonix was first adopted that same year. The current master plan, adopted in 2009, examined three development scenarios and involved citizen input and stakeholder focus groups. A guiding policy of the master plan calls for a family- oriented neighborhood. Two previous studies have been done analyzing the market, similar developments in other communities and financial feasibility /gap. Organization of the Report This report has nine main sections as follows: I. Master Plan Summary II. Location Analysis III. Demographic and Economic Framework IV. Rental Market Overview V. Ownership Market Conditions VI. Competitive Analysis VII. Demand Estimates VIII. Mortgage Availability IX. Conclusions and Recommendations The appendix contains supplemental tables with data supporting statements made herein. Methodology and Sources This study incorporates information from numerous sources including: • Interviews of staff managing deed restricted units in Vail, Avon and Eagle County's down valley communities, the school district, the Eagle River Water and Sanitation District, four realtors, an apartment manager and three mortgage lenders; • Eagle County Assessor records; • The Vail Board of Realtors MLS; • A rent and vacancy survey conducted by Polar Star Properties; • For -rent notices on craigslist.org and in the Vail Daily: • Current data on jobs, employment and the unemployment rate; • The 2000 and 2010 Census; Rees Consulting, Inc. 5/20/2014 1 Draft 4 -3 -14 • Population and employment projections from the Demography Section of the Colorado Department of Local Affairs; and • Findings from the 2007 Eagle County Housing Needs Assessment survey. Area Covered While Vail is the focus of this study, information is also provided on other areas within Eagle County as needed to analyze housing market supply and demand. Eagle County's economy and population are very inter - connected with 1 -70, public transit, and well established commuting patterns. Depending upon topic and information availability, the areas covered in this report include: • Vail, which includes only the area within municipal boundaries when referencing Census data but extends to the zip code boundary for jobs and the developed zone for MILS data. • The Up Valley Area, which includes the towns of Vail and Avon and the unincorporated community of Eagle -Vail, but does not include Beaver Creek, Arrowhead or other development to the west. • Eagle County, which is all encompassing with Vail and the Up Valley area included. Occasionally information is also provided by town within the county, such as when historical data is provided on the sale of deed restricted homes. Rees Consulting, Inc. 5/20/2014 Draft 4 -3 -14 1. Master Plan Summary A Master Plan was finalized in early 2009 for a 3.6 -acre parcel owned by the Town of Vail known as the Chamonix site. According to this plan, 100% of the housing to be developed on the site should be deed restricted, for -sale employee housing. The vision for the site going into the master planning process called for a mix of units serving families with incomes between 60% and 120% of the Area Median Income (AMI), possibly ranging as high as 140% AMI. After considering three development scenarios, the Neighborhood Block scheme was selected which provides for a mix of residential units with a density in the middle of the range considered and open space. It also included a new fire station on adjacent land known as the Wendy's site. This station has since been constructed. Number, Type and Size of Units The Neighborhood Block scheme contains 58 units, ranging from almost 1,300 square feet in size to over 1,600 square feet. Proposed Units by Size Unit Type # of Units Square Feet 2 BR Flats 20 1,292 2 BR Lofts 16 1,333 3 BR Lofts or TH's 8 1,460 3 BR Duplexes 14 1,632 No one - bedroom units are planned. This unit mix provides 81,696 sq. ft. of housing with a density of 16 dwelling units per acre. A main access street, which gained access to the site from Chamonix Road, bisects the site with the 14 three - bedroom duplexes on the north side and the 44 multi - family units on the south side. An alley offers secondary access to the multi - family units. The duplexes will be situated with southern exposure. The multi - family units will have varying north, south, east and west exposure, providing options based on views, sun exposure, highway noise and other preferences. • Units on the north side of the buildings will view residential uses up the hill and the hillside, but will be more protected from 1 -70 noise than other units; • Units facing south will have greater sun exposure in the winter and provide views of the mountains, but will be most prone to highway noise; and • Units facing west and east will have limited mountain views and varying degrees of sun exposure during the day, and moderate exposure to noise from the Interstate. Rees Consulting, Inc. 5/20/2014 3 Draft 4 -3 -14 Income Targeting and Prices Prices for the proposed homes have not yet been determined pending the outcome of this market study and a subsequent analysis of the development's financial feasibility. Based on 2014 AMI's the proposed units should serve households with annual incomes from approximately $40,000 to $120,000. 2014 Area Median Income - Eagle County AMI 1 Person 2 Persons 3 Persons 4 Persons 140% $85,260 $97,440 $109,620 $121,660 120% $73,080 $83,520 $93,960 $104,280 100% $60,900 $69,600 $78,300 $86,900 80% $44,750 $51,150 $57,550 $63,900 60% $36,540 $41,760 $46,980 $52,140 Source: Colorado Housing and Finance Authority For the proposed homes to be affordable for all households with these income categories, prices would need to range from about $135,000 to $450,000. Maximum Affordable Prices AMI 1 Person 2 Persons 3 Persons 4 Persons 140% $316,100 $361,300 $406,500 $451,100 120% $271,000 $309,700 $348,400 $386,700 100% $225,800 $258,100 $290,300 $322,200 80% $165,900 $189,700 $213,400 $236,900 60% $135,500 $154,800 $174,200 $193,300 Source: Rees Consulting calculation To calculate affordable prices for these targeted households, the following assumptions were used: • The monthly payment equals 30% of gross household income; • 20% of the monthly mortgage payment covers taxes, insurance and HOA fees; • Down payments average 5% of the purchase price; and • The interest rate is 5.5% for 30- years. As rates rise, a prediction economists seem to agree upon, the amount that households in the targeted income range can afford will decrease. Amenities As planned, Chamonix will offer the following amenities and design features: • Garages, probably for two cars, with the duplexes; • Parking for multi - family homes on site, probably in common garages under the buildings; • Semi - private stepped courtyards between the duplexes; Rees Consulting, Inc. 5/20/2014 4 Draft 4 -3 -14 • Common area between the two rows of multi - family units large enough for a play area, grill and tables, flower /vegetable beds, etc. • Open space at the east end of the parcel which could potentially be used for a dog park; • Open space at the steeply sloping west end that might provide for viewing for fire station activities separated by a series of low landscaped walls; and • Extensive landscaping, including aspen groves and native vegetation along the southern edge of the parcel to buffer homes from neighboring commercial uses. Site Plan The parcel is about 3.6- acres. Zoning is Housing (H); the proposed use is allowed. The parcel is vacant, with native grasses, a few bushes and, on the southwest side of the parcel, scattered trees. The parcel has a moderate downhill slope from north to south, with a steep slope in the northwest corner of the parcel, which is not planned for development. Views of the mountains occur across 1 -70 to the south, southwest and southeast of the parcel. Chamonix Lane borders the property to the north. Chamonix Road runs along the east and southeast side of the property and the West Vail Fire Station borders the property on the southwest. Access and Infrastructure Access to the site will from Chamonix Lane (to the north) and Chamonix Road (to the east). The access off of Chamonix Road will loop through the West Vail Fire Station to the North Frontage Road, allowing for dual points of access and reducing internal traffic congestion. Power, water and sewer lines are in place on Chamonix Lane. Utilities connections will be provided concurrent with construction; significant utilities /infrastructure improvements are not needed prior to developing the site. Potential Market Impediments Although decisions have not been finalized on many aspects of the Chamonix development, this study examines the marketability of the proposed project taking into consideration: • Deed restrictions that allow only employees earning at least 75% of their income in Eagle County to purchase units and limit resale prices to no more than 3% per year; income limits would not be imposed; • Developing the 44 multi - family units and possibly the duplex units as condominiums; and • An underlying long -term land lease held by the Town of Vail. Rees Consulting, Inc. 5/20/2014 Draft 4 -3 -14 II. Location Analysis Street Address /Street Boundaries The project is located in west Vail just north of North Frontage Road. It is in a highly visible location on the north side of I -70, a major east -west interstate highway through Colorado, just off of exit 173. Project Location Map Surrounding Land Use Highway commercial and strip mall commercial development characterizes the uses off of the North Frontage Road and Chamonix Road, with residential neighborhoods characterizing the use patterns off of Chamonix Lane. • To the south and east of the parcel, off of Chamonix Road, includes two gas stations, a bank and associated commercial uses, a Holiday Inn hotel, cafe and local market and a brew pub. • Bordering the southwest corner of the parcel is the West Vail Fire Station, with access off of the North Frontage Road. Rees Consulting, Inc. 5/20/2014 6 Draft 4 -3 -14 • Primarily single family and duplex units are accessed off of Chamonix Lane to the north of the parcel. Vicinity Map A residential area is located to the north of the parcel accessed via Chamonix Lane. The units are primarily single family homes and duplexes although there are some interspersed townhomes and condominiums. The units were mostly built in the late 1960's and the '70's. Most are modest by Vail standards, and there are few signs of redevelopment /remodeling. Homes appear to be occupied by a mix of residents and second -home owners. The duplexes planned as part of the Chamonix development were placed along Chamonix Lane to ensure the greatest compatibility with adjacent neighbors in terms of unit type, size and style. Rees Consulting, Inc. 5/20/2014 7 �nr Draft 4 -3 -14 The Chamonix parcel, looking to the east from the northwest corner. Chamonix Road borders the east side of the parcel and the truck on the south side is in the West Vail Fire Station parking lot. Some residential uses can be seen on the north side of the parcel, off of Chamonix Lane. Standing on Chamonix Lane to the north, looking east. This shows mountain views and the Holiday Inn hotel. Standing on Chamonix Lane to the north, looking southeast. This shows the mountain views, back of the bank (grey building) and back of the cafe /market (green -blue roof). Rees Consulting, Inc. 5/20/2014 8 Shopping and Dining Draft 4 -3 -14 Standing on Chamonix Lane to the north, looking south. This shows the mountain views, 1 -70 bridge, and two gas stations adjacent to the parcel on the south. Proximity to Services Safeway is within 3- tenths of a mile of the site on North Frontage Road — about a six - minute walk along the relatively flat bike and pedestrian trail. This is also reachable via personal vehicle or bus. Other neighboring amenities include gas stations, bank, hotel, bar /restaurant, local market and, near the Safeway, a barber, UPS store, dental office, child care center, liquor store, coffee shop, Sports Authority, and 7- Eleven. Restaurants include a pizza place, sub shop, cafe, sushi restaurant and quick serve options, including Subway, McDonalds and Qdoba. Public Transit The site is located within % -mile of several bus stops on both the West Vail Red and Green Loop transit lines, including stops off of the North Frontage Road, Chamonix Lane and the South Frontage Road. These lines provide service every 40- minutes in the summer (May 27 through mid - December), once per hour in the spring (April 15 through May 26) and in 30- minute intervals during peak hours in the winter (December 10 through April 14). Buses run between 6 a.m. and 12 a.m. each day, with service offered until about 2 a.m. in the winter. Routes traverse the length of the North and South Frontage Roads, from West Vail to Vail Village. Bike and Pedestrian Access A bike and pedestrian path runs along North Frontage Road to the south of the parcel. This access also travels under 1 -70 to access the South Frontage Road and associated amenities. Parks The Chamonix Master Plan calls for some community gathering spots and semi - private courtyards between the duplex units. Larger open areas are provided on the east and west ends of the Rees Consulting, Inc. 5/20/2014 Draft 4 -3 -14 development. The open space on the east end could be utilized for such uses as a dog park. Otherwise, Town of Vail parks, numerous mountain trails and open spaces are accessed from the property via the bike and pedestrian trails, bus service, and personal vehicles. Schools Children living at Chamonix would attend the following Eagle County public schools: • Red Sandstone Elementary is located at 551 North Frontage Road, 2.3 miles east of the Chamonix site (about a 5 minute drive). • Homestake Peak School, located at 750 Eagle Road in Eagle -Vail, 5.2 miles west of the site, is where middle school children would attend. It offers kindergarten through eighth grade. • Battle Mountain High School, located at 0151 Miller Ranch Road in Edwards, is 11 miles, or about 15 minutes if roads are dry, west of the Chamonix site. School bus service is available with the closest stop a short distance from the site at Chamonix and North Frontage Road. Two different routes serve this stop. The route serving Red Sandstone Elementary, which continues on to Battle Mountain, has 9 students assigned for this stop. Morning pick up is at 7:33. Afternoon drop off is 4:25. For Homestake Peak, pick up is at 7:47 AM and drop off is also at 4:25 PM. Three students from this stop are now assigned to this route. Most of the District's bus routes are running full; a significant increase in students at the Chamonix site would need to be discussed with the District to make sure adequate capacity exists to serve them. Marketability of the Site The site is marketable in many aspects though has attributes that may not appeal to some, especially families with children and others seeking quiet, safe surroundings. It is located between a residential and commercial area, with easy access to groceries and other necessary goods and services. With a bike /pedestrian path running near the property and nearby bus stops serviced by two public transit routes, it is very convenient. Proximity to a transit stop is a big plus — a car is not required to reach most job sites, shopping, skiing and Vail's other amenities. Views of the mountains to the south, southwest and southeast are desirable, as well as the southern sun exposure for units facing that direction. Noise from 1 -70 and Frontage Road bus /truck traffic presents some concerns. The proximity of the West Vail Fire Station also adds some noise concerns, but conversely provides quick emergency response times. Trees will be planted along the south border, helping to mitigate the sight and sounds of traffic. Nonetheless, the use of advanced soundproofing in units to protect against such noise should help the marketability of units. Trees will also be planted around the open spaces surrounding the duplex units and a few scattered throughout the development. Rees Consulting, Inc. 5/20/2014 10 Draft 4 -3 -14 The site is highly visible; it can be seen from 1 -70 and both frontage roads and is conveniently located just off of Exit 173. It will not be difficult to provide directions to potential residents when they make inquiries. Impediments to marketability of the site include: • The proximity to 1 -70 and its noise. While there are few other options within Vail, many down valley housing options would be quieter. • Proximity to adjacent commercial uses. While convenient, these commercial uses generate traffic and bring in persons who are not residents of the community. • Limited public open space in the area. It is a densely developed area with much of the land consumed by buildings and parking lots, private residential lots and steep hillsides. There are no nearby parks within walking distance. • Distance to public schools. All children living in the area would have to bus to school, other than elementary school students who are old enough to bike to Red Sandstone. This is a distinct disadvantage compared to deed restricted housing options located in Edwards and further down valley. Rees Consulting, Inc. 5/20/2014 11 Draft 4 -3 -14 III. Demographic and Economic Framework This section of the market study consists of three parts: • Market Area Demographics, which provides information on population, housing units, households and household composition and size of renter households. Demographic Trends, which presents information from the 2000 and 2010 Censuses to identify trends and gain insights as to how current demographic characteristics will likely be changing in the future. • Economic Conditions, which covers jobs, wages and the distribution of jobs in Eagle County. Since most buyers of deed restricted homes are first time buyers, the focus is on the demographics of renter households. Market Area Demographics As of 2010, Eagle County had a population of around 52,000 persons residing in 19,236 households /housing units. Of these, 2,604 households or 13.5% of the total were within the town of Vail. About one -third of the county's households resided in the larger up valley area. 2010 Population and Housing Occupancy Eagle County is projected to have a relatively strong rate of growth during upcoming years, averaging 2% per year through 2015 then 2.9% per year through 2020. The State Demography Section projects that the county will have a population of 66,382 in 2020, a gain of over 14,000 residents, or about 700 persons per year. These growth estimates may be somewhat overstated; however. State Demography estimates for 2012 indicate the Eagle County has declined slightly since the Census, from 52,197 to 51,944. While most residential units in Eagle County were occupied as primary residences in 2010 (approximately 61%), only 36% of units in Vail were occupied by residents; second homes /vacation accommodations comprised the majority. In the up valley area, the housing occupancy rate was only 48% in 2010. The homes that are not occupied by members of the workforce typically create demand for workforce housing through cleaning, repair, snow removal, landscaping and similar jobs involved in the operation and maintenance of the units. Rees Consulting, Inc. 5/20/2014 12 Vail Up Valley Eagle County Population 5,305 15,257 52,197 Housing units 7,230 13,064 31,312 Households 2,604 6,294 19,236 Housing occupancy rate 36.0% 48.2% 61.4% Source: 2010 US Census Eagle County is projected to have a relatively strong rate of growth during upcoming years, averaging 2% per year through 2015 then 2.9% per year through 2020. The State Demography Section projects that the county will have a population of 66,382 in 2020, a gain of over 14,000 residents, or about 700 persons per year. These growth estimates may be somewhat overstated; however. State Demography estimates for 2012 indicate the Eagle County has declined slightly since the Census, from 52,197 to 51,944. While most residential units in Eagle County were occupied as primary residences in 2010 (approximately 61%), only 36% of units in Vail were occupied by residents; second homes /vacation accommodations comprised the majority. In the up valley area, the housing occupancy rate was only 48% in 2010. The homes that are not occupied by members of the workforce typically create demand for workforce housing through cleaning, repair, snow removal, landscaping and similar jobs involved in the operation and maintenance of the units. Rees Consulting, Inc. 5/20/2014 12 Draft 4 -3 -14 Proportionately more renters live up valley while more owners live down valley. While up valley is home to about one -third of Eagle County's total households, nearly 45% of total renter households reside there. Relatively fewer households can afford to buy homes in the Vail area; the option other than commuting to buy down valley is to rent up valley. Over one -half of the households in Vail and nearly 50% of those in the up valley area rent. Demographic characteristics vary by area. There are clear differences between up- valley and down - valley communities. Vail has proportionately more renters than owners, more singles and roommate households than families, and smaller renter households than down valley. Of the 3,336 renter households living up valley in 2010: • Roommate households were the most common (37 %). • Nearly 30% had only one member living alone. Families were in the minority. About 19% were families with children and 15% were families (both couples and singles) without children. 2010 Renter Households by Type: Up Valley Area Roommates 37% (1,152 total) Li Family, no children 15% (479 total) 2a ro (899 total) Source: 2010 US Census Family, with children 19% (800 total) In Vail, proportionately fewer renter households have children (only 8 %) and more consist of singles living alone (36 %) or with roommates (45 %). Rees Consulting, Inc. 5/20/2014 13 Draft 4 -3 -14 The average size of renter households within the up valley area is about 2.45 persons per unit. In Vail is it considerably smaller at 2.04 persons per renter occupied unit. The largest segment of the renter market is comprised of one- and two - person households, which combined total 61 %. 2010 Renter Households by Size: Up Valley Area 5+ person 4- person 9% 12% (264 total) 1- person (3 3- person 18% (571 total) Demographic Trends 29% (899 total) Source: 2010 US Census son YO (1,U14 total) Between 2000 and 2010, most of the population growth in Eagle County occurred down valley. While growth in Vail was slower, the rate of growth was particularly low elsewhere within the up valley area. The population increased by 25% in the county but only 17% in Vail and just under 6% in the up valley area. Growth in households followed a similar pattern. Total housing units, however, increased at about the same rate in the county and the up valley area (41 %) and at a slower pace in Vail (34 %), where land availability is very limited. The number of housing units grew faster than the resident population and households due to construction of second /seasonal homes. Change in Population, Housing Units and Households: 2000 - 2010 Rees Consulting, Inc. 5/20/2014 14 Vail Up Valley Eagle County Population 2000 4,531 15,326 41,659 2010 5,305 16,234 52,197 % change 17.1% 5.9% 25.3% Total Housing Units 2000 5,389 11,527 22,111 2010 7,230 16,286 31,312 % change 34.2% 41.3% 41.6% Source: 2000 and 2010 US Census Rees Consulting, Inc. 5/20/2014 14 Draft 4 -3 -14 The housing occupancy rate declined by about 7 percentage points in the county, 4 points in Vail and 9 points in the up valley area, indicating a significant rise in second homes. Even though growth in the number of households did not keep pace with growth in second /seasonal homes, the number of units occupied by local residents increased. The up valley area gained 680 households (owners and renters combined) between 2000 and 2010, for an average increase of 68 households per year. The increase in households within the up valley area was due primarily to growth in the number of renter households (a gain of 419 renter households between 2000 and 2010, or an average of nearly 42 households per year). Renters now comprise the majority of households living in Vail (51.5 %). The number of renter households in Eagle County as a whole increased by nearly 1,400 households, or an average gain of 140 households each year. There were some significant changes in the composition of renter households, which varied by area: • Roommate households declined as a percentage of households in all areas, from 34% to 27% in Eagle County, from 44% to 38% within the up valley area and from 49% to 45% in Vail. • Renters living alone increased, especially in Vail, from 33% to 36 %. • The percentage of family households, with and without children, stayed about the same in Vail but increased in the county as a whole; growth in families largely occurred down valley. 2000 2010 Change in Composition of Renter Households: 2000 — 2010 Family, no children Family, with children Living alone Non - family, roommates Family, no children Family, with children Living alone Non - family, roommates Source: 2000 and 2010 US Census Vail Up Valley Eagle County 1,032 2,917 5,499 12% 11% 17% 7% 19% 25% 33% 25% 25% 49% 44% 34% 100% 100% 100 1,340 3,336 6,893 11% 15% 18 8% 18% 29% 36% 29% 26% 45% 38% 27% 100% 100% 100 Changes in renter household size also varied by region: • Renter households decreased in size in both the town of Vail and the up valley area while size increased slightly in the county. Rees Consulting, Inc. 5/20/2014 15 Draft 4 -3 -14 • Renter households in all areas predominately have one or two - persons (56% to 73%), followed by 3- person households (16% to 18 %). • A much larger percentage of households have three or more members in both the county (26 %) and the up valley area (22 %) than in Vail (10 %). The population and labor force in the Vail area is aging, as is the trend in other Colorado mountain resort communities. The age of renter households increased between 2000 and 2010. • The largest increase occurred in households 35 to 44 years of age. • The percentage of households under 35 declined in all areas; although these younger households comprise a larger percentage of households in Vail and the up valley area than in the county as a whole. • Only households with a householder under 25 years of age decreased in number as well as percentage in all areas ( -21 in Vail, -150 in Eagle County and -153 in the up valley area). The Economy The economy in Eagle County is slowly recovering. Eagle County currently had about 37,820 jobs on average in 2013. This is down from the peak of about 40,500 jobs in 2008, but up from a low of 35,660 in 2010. The loss of 2,680 jobs reported by the Colorado Department of Local Affairs is much lower than a local estimate of nearly 6,000 jobs, a difference likely attributed in part to construction jobs, which are hard to track. Since 2010, total employment has increased by approximately 2,160 jobs, which equates to an average rate of growth of about 2% per year. Change in Jobs: Eagle County, 2005 — 2013 44,000 42,000 40,000 38,319 y 38,000 0 .r 36,000 0 34,000 32,000 40,163 40,499 35,662 36,030 37,821 30,000 1 1 1 1 1 T� 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Colorado Department of Local Affairs (DOLA), State Demography Section Rees Consulting, Inc. 5/20/2014 16 Draft 4 -3 -14 The unemployment rate in Eagle County has been declining. Unemployment reached a high of 9.6% in 2010 and declined to an average annual rate of 6.6% in 2013, slightly lower than the state average of 6.8 %. This is still much higher than pre- recession rates, which varied between 2.9% and 3.9% from 2005 and 2008, although during the 2013/14 ski season the rate hovered just above 5 %. Average Yearly Labor Force and Employment: Eagle County 2005 - 2013 Year Labor Force Employment Unemployment Unemployment Rate 2013 29,391 27,454 1,937 6.6% 2012 29,793 27,388 2,405 8.1% 2011 29,293 26,689 2,604 8.9% 2010 29,674 26,836 2,838 9.6% 2009 30,624 28,235 2,389 7.8% 2008 31,837 30,705 1,132 3.6% 2007 31,161 30,267 894 2.9% 2006 30,206 29,191 1,015 3.4% 2005 28,670 27,555 1,115 3.9% Source: Colorado Department of Labor and Employment It appears that the decline in the unemployment rate has been due in part to the continued out mitigation of the labor force. The total number of Eagle County's residents who were employed in the 2013/14 ski season was slightly lower than in the 2012/13 season. Employment and Unemployment by Month: Eagle County July 2012 — June 2013 35000 -F— - --am Employment (Unemployment Rate ( %) 12% 30000 1% 0.' '° 10% 8 °° ° UO 25000 /a .8% %.7%7.5.9 M ° ° 8 /o .r .6% 6.4 0 3 % 0 /o _J 20000 — — 6.0°/c6.0 %5.8% 5.9 %�.0% .4 %.1 %5.3% 6% E, 0 15000 0 E w 4% d 10000 2% 5000 Source: Colorado Department of Labor and Employment Rees Consulting, Inc. 5/20/2014 17 Draft 4 -3 -14 Unemployment rates in Eagle County vary by season. Unemployment is lowest during the winter months (December through March) and highest during the shoulder seasons, in May and November. For those who qualify, filing for unemployment is a common way to make it through the shoulder seasons. Eagle County jobs paid an average annual wage of about $39,187 in 2012. About 40% of jobs in Eagle County are in the lowest wage sectors of accommodations and food, arts and retail trade, averaging between about $28,700 and $34,000 per year. Vail is no longer the economic center of Eagle County in terms of jobs. Based on the Quarterly Census of Employment and Wages (does not include sole proprietors and employees exempt from unemployment insurance), approximately 26% of the county's employees work in the Vail zip code area. Just over 15% of establishments (businesses, government, non profits, etc.) are located in Vail, an indication that employers tend to be larger in Vail than elsewhere in the county. Wages in Vail are slightly higher than in Eagle County as a whole. Employees and Employers by Area Average Jobs Eagle County Vail Percent Vail 2012 28,179 7,401 26.3% 2013: 1st -3rd Qtr. 28,910 7,569 26.2% # of Establishments 2012 3,191 493 15.4% 2013: 1st -3rd Qtr. 3,199 483 15.1% Source: Colorado Department of Labor and Employment, Quarterly Census of Employment and Wages Rees Consulting, Inc. 5/20/2014 18 Draft 4 -3 -14 IV. Rental Market Overview To assess the extent to which limited rental availability and rising rents could impact the demand for ownership housing, rental market conditions in the Vail area are summarized, including number of units, vacancy rates, apartment and condominium rents, and trends in rental rates. Apartment Inventory This analysis focuses on two major apartment complexes in Vail, two in the Dowd Junction area and three in Avon. Combined, these properties have a total of 1,046 units. These units house approximately 30% of the renter households residing in the area. All but one of these properties, River Run, has some type of occupancy and /or income restriction. General Description of Competing Properties The only apartment projects within Vail through Avon that were not examined as part of this analysis are: • Riverview Apartments, a 72 -unit rent subsidized Section 8 complex in Eagle -Vail serving very low income households; • Three seasonal employee projects owned by Vail Resorts: First Chair, Vail, a 124 -bed project completed in 2011; River Edge, Avon, a 103 -unit project built in 1997; and The Tarnes, Avon, a 136 -unit project built in 2000; • 18 rental units located at Vail Commons above retail space; and • 36 units in two projects (Buzzard Park and Creekside) owned by the Town of Vail and rented to Town employees. Rees Consulting, Inc. 5/20/2014 19 Buffalo Buffalo EagleBend Kayak Middle River Run Timber Ridge Ridge II Crossing Creek Ridge Management Polar Star Corum Polar Star Polar Star Coughlin & Texas Capital Corum Properties Properties Properties Company Partners LLC Location Avon Avon Avon Dowd Vail Dowd Junction Vail Junction # of floors 4 4 3 3 3-8 3-4 3 Unit Type flats flats flats flats flats Flats /lofts /TH flats Year Built 2003 2003 1990 2000 2003 -04 1985 1981 General excellent excellent good good excellent good poor Total Units 68 176 294 50 142 117 199 Restrictions Local LIHTC /Mkt Local Local LIHTC /Mkt Mkt Local 50% AM 40 6 60% AM 92 91 80% AM 68 120% AM 294 50 None 44 45 117 199 The only apartment projects within Vail through Avon that were not examined as part of this analysis are: • Riverview Apartments, a 72 -unit rent subsidized Section 8 complex in Eagle -Vail serving very low income households; • Three seasonal employee projects owned by Vail Resorts: First Chair, Vail, a 124 -bed project completed in 2011; River Edge, Avon, a 103 -unit project built in 1997; and The Tarnes, Avon, a 136 -unit project built in 2000; • 18 rental units located at Vail Commons above retail space; and • 36 units in two projects (Buzzard Park and Creekside) owned by the Town of Vail and rented to Town employees. Rees Consulting, Inc. 5/20/2014 19 Jam_ Property Location Map f � I Buffalo Rid e tuber Ridge Middle CreE Rror Si: ir- GLfch Avon-; ,1&f oh Kayak Crossing !` EagleBend Nis[ 1 � . River Run nta „ rwmigan ro.n.,n982 "sax A/c G-Y r. ; s y wv Idin,urn 0 24 Draft 4 -3 -14 P I Occupancy Levels Rental occupancy levels were very high in March. The overall rate among the county's major non- seasonal apartment complexes was over 97%. Timber Ridge, water damage and long term wear /tear limited the ability to rent some units, had the highest vacancy rate and skewed the overall average. Excluding Timber Ridge, the overall average occupancy rate was nearly 99%. Apartment vacancy rates remained low through 2009, shot upward in 2010, started to decline in 2011 and dropped to their lowest point in three years by the first quarter of 2013. More specifically: • Vacancy rates remained low through 2009, long after the recession caused rental markets to soften throughout much of the country. This was due to the strong influence that construction has on jobs and the economy in the Vail Valley; construction projects initiated before the recession were not completed until 2009. • In 2010, vacancies shot upward from a combination of job losses and Vail Resorts terminating their master leases on many units. Their need to import seasonal employees dropped when high unemployment freed up many local workers to fill seasonal ski resort positions. Vail Resorts had extremely high vacancies in the seasonal worker properties they owned, as was the case at other Colorado ski resorts. Rees Consulting, Inc. 5/20/2014 20 Draft 4 -3 -14 Vacancy rates vary by season. Rates are consistently lower in the first quarter of each year and tend to be lowest in the third quarter. April and May generally have the highest turnover. The following table shows that properties in Avon and Edwards have similar occupancy levels as those within Vail. This means that, as occupancy levels continue to rise in general with the economy's recovery, moving down valley will not be a viable alternative to the decreasing availability and rising rents in the Vail area. Occupancy Levels by Property, March 2013 Rents The rents shown on the following table are market rates or rents for units with income restrictions in the same range at 80% to 120% AMI which, according to property managers, are set based on market conditions rather than income caps. In other words, the maximum allowed rents for 80% and 120% are not charged; rents reflect the market. The rents for Low Income Housing Tax Credit (LIHTC) units with restrictions at 50% and 60% AMI have been excluded from this analysis. Rents by Unit Type and Property Location # Units Occupancy Kayak Middle River Rate Buffalo Ridge Avon 68 100% Buffalo Ridge II Avon 176 100% EagleBend Avon 294 99% Eagle Villas Eagle 120 93% Kayak Crossing Avon 50 98% Lake Creek Edwards 270 99% Middle Creek Vail 142 100% Timber Ridge Vail 198 87% River Run Avon 117 100% Total /Average 1 BR 1435 97.3% Source: Polar Star Properties Market Summary, 3/17/14 Rents The rents shown on the following table are market rates or rents for units with income restrictions in the same range at 80% to 120% AMI which, according to property managers, are set based on market conditions rather than income caps. In other words, the maximum allowed rents for 80% and 120% are not charged; rents reflect the market. The rents for Low Income Housing Tax Credit (LIHTC) units with restrictions at 50% and 60% AMI have been excluded from this analysis. Rents by Unit Type and Property Buffalo Buffalo Ridge II Eagle Kayak Middle River Timber Average Ridge Bend Crossing Creek Run Ridge Income 80% 50% - Mkt 120% AMI 120% 60% -Mkt Mkt None Restriction AMI AMI Studios $735 mkt $735 1 BR $930 $925 mkt $804 $1,703 $1,091 2 BR /1 BA $1,220 $1095 mkt $1,045 $1,140 $1,075 $1,115 2 BR /2 BA $1,910 $1,910 3 BR $1,455 $1,324 $1,450 $1,985 $2,210 $1,685 4+ BR $1,650 $1,650 Rees Consulting, Inc. 5/20/2014 21 Draft 4 -3 -14 Historically rents have generally been higher in Vail than down valley. Current rents among these properties, however, only partially reflect this. For example, rents for three - bedroom units at Middle Creek in Vail average about $575 higher than at Buffalo Ridge, EagleBend and Kayak Crossing further down valley. Alternatively, River Run, a condominium project in the Dowd Junction area that functions as an apartment property (all units owned and managed by one company) without any type of occupancy or income restriction, recently raised rents by around $540 per month, exceeding rents in Vail. The extent to which these rent increases may negatively impact occupancy levels or marketability can be evaluated by mid - summer when units vacated in April /May should be leased. Condominium /Town home Rentals During the last week in April, a total of 61 units were listed for rent in the Up Valley area (Vail through Avon), 40 on craigslist and 24 in the Vail Daily, with only three duplicates. Of these, most were condominiums although a few were listed as apartments, townhomes, duplexes and lock offs. Rents for these units ranged from $700 for a studio to $3,200 for a three bedroom duplex. The overall average rent for these units was $1,918. Condominium and Townhomes For -Rent Listings Unit Type Average Rent 1 Bdrm $1,285 2 Bdrm $1,859 3 Bdrm $2,550 Trends in Rents Rents are rising after several post- recession years when rates dropped and discounts were widespread. The overall average rent for apartments increased 3% between July 2012 and 2013, and the per- square- foot average grew by 15 %, indicating relatively higher increases for smaller units. Change in Average Apartment Rents July 2012 — July 2013 July July March 2012 2013 2014 Avg. Rent /Unit $1,159 $1,162 $1,264 Avg, Rent /SF $1.17 $1.35 $1.46 Source: Polar Star Properties Rees Consulting, Inc. 5/20/2014 22 Draft 4 -3 -14 Rates for units listed for rent in the Vail Daily and on craigslist.org were higher in April 2014 than in July /August 2013. Condo /Townhome Rent Increases Unit Type Average Rent July /Aug 2013 1 Bdrm $1,104 2 Bdrm $1,762 3 Bdrm $2,106 Source: Vail Daily and craigslist Average Rent Percent Change April 2014 $1,285 16.4% $1,859 5.5% $2,550 21.1% The decreased availability of rental units combined with rising rents will cause some renters who want to live in Vail to consider buying, especially households that have been residing in the area for some time. Employees moving into the area will be more likely than longer term residents to live with multiple roommates, allowing them to share the cost of higher rents with others and crowd into and occupy available units. Market rents have increased to levels where mortgage payments could be competitive, depending upon how units at Chamonix are priced. To be affordable for households with incomes ranging from 60% AMI to 140% AMI, monthly payments would need to range from about $900 to $3,000, with resulting in an overall average below $2,000 per month. Rents now average about $1,860 for two - bedroom condos /townhomes and $2,550 for three bedrooms. Rees Consulting, Inc. 5/20/2014 23 Draft 4 -3 -14 V. Ownership Market Conditions This section provides an overview of the ownership market in Eagle County for both market rate and deed restricted housing. This section evaluates current conditions and past trends including the number of sales, sales prices, and inventory of units listed for sale. Variations in market conditions by location within the valley is also analyzed to determine how values vary and if down valley housing is competitive given commuting costs. The focus is on deed restricted homes and market units priced less than $500,000 given that units at this price point would be most competitive with homes at Chamonix. Because Chamonix is proposed to target households with incomes in the 60% to 140% AMI range, this equates to a price range of $135,000 to $450,000, or a midpoint around $300,000. County -Wide Ownership Market Trends The ownership market in Eagle County has improved since 2009, although the recovery has not been robust or consistent across the board. Dollar volume jumped quickly in 2010 due to high -end sales then declined due to sales of bank owned properties and lower -end bargains. The number of sales, however, has steadily increased since 2009. In 2013, the overall dollar volume decreased slightly from 2012 yet the number of sales continued to increase. $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 Trends - Transactions and Dollar Volume 2009 2010 2011 2012 2013 � Dollar Volume Number of Transactions Source: Land Title Guarantee 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Just over 1,400 residential units sold in Eagle County in 2013. This figure includes the sale of 45 deed restricted units. The inventory of bargains and bank owned homes largely disappeared as buyers became motivated by several factors: • Evidence that prices had hit bottom and were starting to rebound; • Economic recovery; and Rees Consulting, Inc. 5/20/2014 24 Draft 4 -3 -14 • Widespread predictions that mortgage interest rates will rise. Of total sales in 2013, over half were for prices at or below $500,000. The free market overall remains priced higher than deed restricted units in most of the county. The average 2013 sales price of $887,330 is nearly three times the $300,000 midpoint of the price range targeted by Chamonix. Residential Sales by Price Range, 2013 While non -local buyers, often paying cash, were some of the first buyers to take advantage of lower, post- recession prices, over half of the sales in Eagle County in 2013 were to local buyers. Sales to locals drove the high number of sales in 2013 of units priced under $500,000. All Sales by Unit Type, 2013 Origin of Buyer Number of Percent of Units Units Sold Sold Local 943 53 Front Range 267 15% Out of State - US 532 30% International 24 1% Total 1,766 100 Source: Land Title Guarantee Note: 365 vacant lots and non- residential sales included in these figures. The number of sales were about evenly divided in 2013 between up valley (Vail through Avon) and mid /down valley communities. Just over one -third of sales were within Vail. Vail Up Valley Area Down Valley Source: Land Title Guarantee Sales by Area, 2013 Number of Sales 598 842 924 Percent of Sales 34% 48 52% Rees Consulting, Inc. 5/20/2014 25 Number of Sales Percent of Sales Average Price <$500,000 724 51.7% $306,338 $500,001 - $1,000,000 374 26.7% $696,944 $1,000,001 - $1,500,000 108 7.7% $1,237,384 $1,500,001- $2,000,000 74 5.3% $1,734,328 >$2 million 121 8.6% N/A Total /Average 1,401 100.0% $887,330 Source: Land Title Guarantee While non -local buyers, often paying cash, were some of the first buyers to take advantage of lower, post- recession prices, over half of the sales in Eagle County in 2013 were to local buyers. Sales to locals drove the high number of sales in 2013 of units priced under $500,000. All Sales by Unit Type, 2013 Origin of Buyer Number of Percent of Units Units Sold Sold Local 943 53 Front Range 267 15% Out of State - US 532 30% International 24 1% Total 1,766 100 Source: Land Title Guarantee Note: 365 vacant lots and non- residential sales included in these figures. The number of sales were about evenly divided in 2013 between up valley (Vail through Avon) and mid /down valley communities. Just over one -third of sales were within Vail. Vail Up Valley Area Down Valley Source: Land Title Guarantee Sales by Area, 2013 Number of Sales 598 842 924 Percent of Sales 34% 48 52% Rees Consulting, Inc. 5/20/2014 25 Draft 4 -3 -14 Sales were about evenly split between single family homes and multi - family units. The similarity in average price between the two categories is not typical in most market areas and can be attributed to the sale of high -end, multi - family second /vacation homes. Residential Sales by Unit Type, 2013 Number of Percent of Units Average Price Units Sold Sold Single Family 707 50.5% $970,764 Multi Family 694 49.5% $802,332 Total /Average 1,401 100.0% $887,330 Source: Land Title Guarantee Price Variation by Area Prices vary widely within Vail, due to the location, age, size and quality of units within various areas of the town. The Chamonix parcel is within the Buffer Creek, Vail Das Shone, Vail Heights, Vail Ridge area, where the median price in 2013 was $480,000. The average price per square foot was $475 for single family homes and $349 for multi - family units. County wide, variation in price is location dependent but is also influenced by age and size of units. The median price of 2013 sales in Gypsum, Edwards and Avon was lower or equal to the mid point of $300,000 under consideration for Chamonix. 2013 Sales by Area and Price Rees Consulting, Inc. 5/20/2014 26 Number Median Avg. PPSF Avg. PPSF of Sales Price SF MF Bighorn, East Vail 85 $471,000 $475 $405 Vail Village 67 $1,650,000 $1,485 $1,581 Lionsridge, Sandstone, The Ridge, The Valley 40 $395,000 $506 $1,041 Buffer Creek, Vail Das Shone, Vail Heights, Vail Ridge 11 $480,000 $475 $349 Intermountain, Matterhorn, Vail Village West 45 $527,000 $394 $372 Minturn, Redcliff 43 $305,000 $271 $257 Eagle -Vail 80 $427,500 $247 $226 Avon 121 $278,000 $244 $326 Edwards 87 $300,000 $229 $258 Homestead, South 40 56 $422,500 $242 $225 Eagle 229 $341,000 $173 $160 Gypsum 229 $228,500 $133 $97 Source: Land Title Guarantee Note: 365 vacant lots and non - residential sales included in these figures. Rees Consulting, Inc. 5/20/2014 26 Draft 4 -3 -14 Availability of Market Housing The availability of housing listed for sale in Eagle County at prices under $500,000 is very limited. A total of 78 units as of early April were for sale at this price point in the major communities. This equates to a 1.3 -month inventory based on 724 sales in this price range in 2013. While the inventory of homes listed for sale may increase in the summer months it was very tight as of early April. Nearly half of the 78 units were condominiums, most of which were located in Vail. While the down valley inventory of homes in this price range has been much larger in recent years, only 21 units were for sale in Eagle and 16 units in Gypsum. To buy a free market single family home for less than $500,000 generally requires living in Eagle and Gypsum. Single family homes at this price point are no longer available in Edwards. Of the 15 units in Edwards, 13 were condominiums and the other two were duplex units. Market Units Listed for Sale at <$500,000, by Type and Location Condo Townhome Duplex Single Total Family Listings Vail 23 2 1 26 Edwards 13 Eagle Gypsum 2 15 7 4 9 21 2 13 16 36 11 7 24 78 Source: Vail Board of Realtors MLS Note: A list of units for sale by area is in the appendix to this report. Opportunities to buy a free market homes for less than $300,000 were very limited throughout the county —12 in total, half of which were condominiums in Vail built in the 1960's or early '70's. Choice improves in the $300,000 to $400,000 range where 30 units were listed for sale. For this price, a buyer could choose among condominiums in in Vail or Edwards, small single family homes or larger townhomes in Eagle, or two- to four - bedroom single family homes in Gypsum. In the $400,000 to $500,000 price range, choices in Vail range from a lodge unit to a 1,500 square foot duplex. The average age of these 14 units is 42 years, with most built in the early 1970's. Of the five units in Edwards, four were larger, relatively newer condominiums (compared to Vail) and one townhome. In Eagle, a total of 7 duplexes and single family homes were for sale, averaging 2,500 square feet. In Gypsum, 10 single family homes were for sale at about the same average size as in Eagle though the range was much larger, from 1,816 to 4,130 square feet. The variation in price per square foot is indicative of the difference in home values in the county. At $527 per square foot the price of homes listed for sale in Vail under $500,000 is nearly three times the average price in Gypsum. The average price per square foot drops sharply between Vail and Edwards ( -45%) but then declines more gradually between Edwards and Eagle ( -30%). The difference in the average price per square foot between Eagle and Gypsum was only $19. Rees Consulting, Inc. 5/20/2014 27 Draft 4 -3 -14 Market Units Listed for Sale at <$500,000, by Price Range and Location A total of 26 residential units were listed for sale in Vail in early April and priced under $500,000. The four units for sale most comparable to the proposed Chamonix units in terms of location and suitability for occupancy by year -round residents were listed for an average price of $458,750, averaged 1,298 square feet in size and were built between 1969 and 1972. Comparable Market For -Sale Listing in Vail Price Project /Area Bdrms Baths Sq Ft Price /SF Yr Built Type $432,500 Chamonix Ln 2 2 1103 $392 1972 TH $432,500 Chamonix Ln 2 2 1110 $390 1972 TH $475,000 Chamonix Ln 3 2 1480 $321 1969 Condo $495,000 East Vail 2 3 1500 $330 1967 Duplex Source: Vail Board of Realtors MLS, 4 -8 -2014 Of the comparable properties: • Two are townhomes on Chamonix Lane that are within different phases of the same property. Each townhome is listed at $432,500. One unit had just been listed in early April. The other had been on the market for about one month and received much interest — 6 or 7 showings within a few weeks. Most were from professionals who had lived in Vail some time (not new to the area) and were in their late 20's to early 40's. Some were singles and others were couples, but none had children. The units both have homemade storage sheds and small yards, but no garages. • One is a condominium listed for sale at $475,000 on Chamonix Lane that was originally a three - bedroom unit, but later converted into a two - bedroom unit on the upper floor with a lock -off studio and kitchen downstairs that can be rented separately. The two units combined total 1,480 square feet. It was built in 1969. It has a storage closet off of the patio, but no garage. The property had three offers within a couple of days of being listed — one from a Denver resident looking to buy a second home and two from developers looking for a unit to deed restrict in order to satisfy the Town's housing requirements. Rees Consulting, Inc. 5/20/2014 28 Vail Edwards Eagle Gypsum Total $100,000 - $149,999 1 1 $150,000 - $199,999 1 1 $200,000 - $249,999 1 1 1 3 $250,000 - $299,999 6 1 7 $300,000 - $349,999 3 5 11 2 21 $350,000 - $399,999 2 4 1 2 9 $400,000 - $449,000 7 2 4 3 16 $450,000 - $500,000 7 3 3 7 20 Total Listings 26 15 21 16 78 Avg. Price /Sq Ft $527 $308 $212 $193 Source: Vail Board of Realtors MLS, 4 -8 -2014 A total of 26 residential units were listed for sale in Vail in early April and priced under $500,000. The four units for sale most comparable to the proposed Chamonix units in terms of location and suitability for occupancy by year -round residents were listed for an average price of $458,750, averaged 1,298 square feet in size and were built between 1969 and 1972. Comparable Market For -Sale Listing in Vail Price Project /Area Bdrms Baths Sq Ft Price /SF Yr Built Type $432,500 Chamonix Ln 2 2 1103 $392 1972 TH $432,500 Chamonix Ln 2 2 1110 $390 1972 TH $475,000 Chamonix Ln 3 2 1480 $321 1969 Condo $495,000 East Vail 2 3 1500 $330 1967 Duplex Source: Vail Board of Realtors MLS, 4 -8 -2014 Of the comparable properties: • Two are townhomes on Chamonix Lane that are within different phases of the same property. Each townhome is listed at $432,500. One unit had just been listed in early April. The other had been on the market for about one month and received much interest — 6 or 7 showings within a few weeks. Most were from professionals who had lived in Vail some time (not new to the area) and were in their late 20's to early 40's. Some were singles and others were couples, but none had children. The units both have homemade storage sheds and small yards, but no garages. • One is a condominium listed for sale at $475,000 on Chamonix Lane that was originally a three - bedroom unit, but later converted into a two - bedroom unit on the upper floor with a lock -off studio and kitchen downstairs that can be rented separately. The two units combined total 1,480 square feet. It was built in 1969. It has a storage closet off of the patio, but no garage. The property had three offers within a couple of days of being listed — one from a Denver resident looking to buy a second home and two from developers looking for a unit to deed restrict in order to satisfy the Town's housing requirements. Rees Consulting, Inc. 5/20/2014 28 Draft 4 -3 -14 • The other unit listed for sale that is somewhat comparable to the proposed Chamonix homes is a duplex unit in east Vail with an EHU restriction (occupancy by an employee working 30+ hours in Eagle County). This 1,500 square foot, two - bedroom unit built in 1967 is listed at $495,000. It has been on the market for about one year. Interest has been moderate with 6 to 8 showings to qualified buyers. These potential buyers have all been single or couples without children. They have been considering homes as far down valley as Edwards, although some have also looked in Eagle. Sales of Deed Restricted Units County Assessor records indicate 144 deed restricted housing units sold from 2010 through March 2014, for an average of nearly 35 units per year or 2.8 units per month. In 2010 and 2011, the inventory of deed restricted units listed for sale was large due to a combination of factors: employees left the valley due to lack of work, opted to purchase free market homes when prices dropped, or delayed purchasing due to economic uncertainty and tough mortgage lending standards. By 2013, however, the deed restricted market had rebounded with 45 sales in a single year. In 2013, a record was set at the largest deed restricted development in the county, Miller Ranch. By the end of the year, the inventory of units listed for sale had been largely absorbed; none were listed for sale through Eagle County's Valley Home Store. The trend in deed restricted sales in Vail differed from that in the rest of the county. The number of sales peaked in 2010 then declined to only one sale in 2013. This was due to decreased availability of units for sale rather than demand, however. When owners of deed restricted units moved out of Vail during the recession, units became available for others to buy. Also two new units were added in 2010, the Arosa duplex. Availability did not last for long, however, as there were sufficient lottery applicants to purchase all homes that became available. Buyers during this period were always able to obtain maximum allowed resale prices, an indication that demand continued to outweigh supply. Sales of Deed Restricted Homes, 2010 — March 2014 Rees Consulting, Inc. 5/20/2014 29 2010 2011 2012 2013 2014 Total Percent of Jan -Mar Total Vail 11 5 4 1 2 23 16.0% Avon 1 1 0.7% Edwards 25 14 21 30 2 92 63.9% Eagle 2 4 5 5 1 17 11.8% Gypsum 7 7 4.9% Basalt 1 2 1 4 2.8% Total 39 24 30 45 6 144 100.0% Source: County Assessor data. Note: units with covenants only requiring preference be given to employees not included. Rees Consulting, Inc. 5/20/2014 29 Draft 4 -3 -14 Unlike with the free market, prices of deed restricted housing do not vary much by community. The homes at Miller Ranch in Edwards have generally been higher on both a per -unit and per- square -foot basis than units in Vail. While the development includes single family homes, it also includes duplex and condominium units. Deed restricted prices have been consistently lower in Eagle but the price differential is not nearly as great as in the free market. Prices of Deed Restricted Sales by Area, 2010 — 2013 Avg. Price /Unit 2010 2011 2012 2013 Eagle $172,500 $145,000 $153,700 $202,300 Edwards $247,904 $238,700 $237,319 $253,220 Gypsum $157,100 Vail $238,718 $199,060 $197,400 $164,300 Avg. Price /SF Eagle $189 $144 $130 $177 Edwards $226 $197 $200 $219 Gypsum $141 Vail $195 $167 $200 $177 Source: County Assessor data While sales of deed restricted homes in Vail have historically been able to command the maximum appreciation allowed, this has not always been the case down valley. Following the recession, the inventory grew and it was clearly a buyers' market. In 2011, deed restricted homes sold for 10% to 20% below allowed maximum resale price. The trend is reversing, however. In 2012, resale prices were generally 5% to 10% below the allowed maximum, and by 2013 the reduction averaged around 5 %. So far in 2014, some sellers have been able to obtain full appreciation while others have had to reduce prices up to 7% reduction. Sellers of smaller units are better able to stay firm on price whereas larger, more expensive homes are taking the biggest price hits. The down valley deed restricted market is definitively switching from being a buyer's to a seller's market. The 2010 average sale price for deed restricted homes in Vail may best represent the prices of the town's entire deed restricted inventory since there have been few sales since then and only one in 2013. Availability of Deed Restricted Housing Very few deed restricted homes are available for purchase. As of late April, four units at Miller Ranch and one at Eagle Ranch were listed for sale through the Valley Home Store. The Town of Vail had received notification that two units (one at Red Sandstone and one at Vail Heights) were being listed for sale. These seven units combined equal a 1.9 -month inventory based on 45 sales in 2013. Rees Consulting, Inc. 5/20/2014 30 Deed Restricted Units Listed for Sale Unit Type Development Town Bdrms Price Condo* Vail Heights Vail 1 $212,544 Condo Red Sandstone Vail 2 $236,248 Condo Miller Ranch Edwards 2 $183,000 Condo Miller Ranch Edwards 3 $248,000 Townhome Eagle Ranch Eagle 3 $354,900 Single Family Miller Ranch Edwards 3 $390,000 Single Family Miller Ranch Edwards 3 $354,000 *Town of Vail employees have priority. Note: Table does not include units that may be listed by realtors. Lot Sales Draft 4 -3 -14 In 2013, a total of 176 vacant residential parcels sold for an average of $264,750, up from 103 sales in 2012 and 100 sales in 2011. Foreclosures Short sales and sales of bank owned homes obtained through foreclosure should not have significant impact on the market in the near future. The number of foreclosures has dropped off sharply. In 2011, 463 foreclosures were filed in /near the county's major towns (not including the portion of Eagle County within the Roaring Fork valley). In 2013, the number had dropped to 178 or about 36% of the total two years before. Foreclosures Filed by Town, 2011 and 2013 Compared 2011 2013 Avon 103 43 Eagle 109 36 Edwards 64 34 Gypsum 152 51 Vail 35 14 Total 463 178 Source: Eagle County Public Trustee Rees Consulting, Inc. 5/20/2014 31 Draft 4 -3 -14 VI. Competitive Analysis This section will focus on deed restricted units throughout the county. This analysis, in combination with the pricing and availability of free market housing both in Vail and down valley are used to determine the prices that the proposed units can command (see Conclusions and Recommendations). This analysis first focuses on the inventory of deed restricted ownership units in Vail then provides information on the nearly 650 other deed restricted units elsewhere in Eagle County. The marketability of amenities and design features is then examined. Vail Deed Restricted Inventory A total of 137 deed restricted condominium, townhome and duplex units are located within the town of Vail. This inventory does not include apartments. The largest project is Vail Commons, with 53 units. All of the inventory is deed restricted for occupancy by employees who work in Eagle County 30 or more hours per week. Most units (about 60 %) also have resale price caps that limit appreciation in order to maintain permanent affordability. The other 40% are Employee Housing Units (EHU's) units, which are scattered in various developments in Vail. These 56 units have occupancy restriction (they can only be owned by or rented to a household with an employee who works 30 or more hours in Eagle County). These units have no initial or resale price restrictions, nor are they tracked by the Town of Vail. Inventory of Deed Restricted Units in Vail Shading denotes focus of analysis. Location # Units Arosa Duplex 2 North Trail Townhomes 6 ERWSD Pitkin Creek & Trailridge 2 Red Sandstone 18 Vail Commons 53 Employee Housing Units (EHU) 56 Total 137 Not all of these units are owner occupied, including 9 units at Red Sandstone — 7 are owned by the Eagle River Water and Sanitation District and renter occupied and 2 are owned by Mountain Valley Development Services. This analysis will focus on the 79 units shaded in the table above since they are the most comparable to the proposed Chamonix units in terms of deed restrictions and method by which they are sold to qualified buyers. Rees Consulting, Inc. 5/20/2014 32 Draft 4 -3 -14 Arosa Duplex A LEED Silver Certified duplex completed in 2010 and located at the start of Arosa Drive in West Vail, this development is comprised of two units, each with three - bedrooms, two and one -half bathrooms and attached two -car garages. These units are two floors and are approximately 1,500 square feet of living area plus garages. Since this project is fairly new, applicants for these units are considered in the Demand Analysis section of this report. Units are located at the west end of North Frontage Road, where it turns north and becomes Arosa Drive. The City Market center and associated services are less than one mile east on North Frontage Road from the development. A transit stop is located about two - tenths of a mile from the duplex. The duplex is nestled on a small, relatively flat site at the end of a gulley. Residential uses are across the street and north of the site. The duplex gets good sun exposure, with one unit having south, east and west facing exposure and the other having north, east and west exposure. Views to the south look upon 1 -70 and the mountains; hills /mountains are seen in the other directions. Noise from I- 70 is very apparent. The Arosa units sold in 2010 for $402,300 and $410,300, or $254 per square foot. North Trail Town Homes This six -unit complex completed in 2001 is located at the intersection of Arosa Drive and Garmisch Drive. This development is comprised of: • 4 two - bedroom, two -bath townhomes located in a four -plex, all with attached one -car garages These units are two floors and start at approximately 1,230 square feet. 2 three - bedroom, two -bath townhomes located in a duplex, with attached one -car garages. These units are two floors and start at approximately 1,440 square feet. This complex has little exposure to 1 -70 noise. It also has the best park access of all comparables, being located adjacent to Ellefson Park, providing usable outdoor recreation space for the residents. It is located in quiet residential neighborhood along Garmish Drive, which dead ends just east of the development. Duplex units face north /south and the 4 -plex faces east /west with views of hills and mountains in all directions. The nearest transit stop is about four - tenths of a mile from the development. The nearest large grocery store Rees Consulting, Inc. 5/20/2014 33 Draft 4 -3 -14 (Safeway) is less than one mile, along with restaurant, fuel, convenience store, mail, lodging and shopping services. One of the six units in North Trail townhomes has sold since 2010 for a price of $223,800 or $198 per square foot. Red Sandstone Creek This 18 -unit complex completed in 1999 is located on Red Sandstone Road across from the Potato Patch Club in Vail. This development is comprised of two buildings with dispersed unit types of: • 2 one - bedroom, one -bath townhomes, with attached one -car garages. These units are two floors and approximately 850 square feet. • 10 two - bedroom, one -bath townhomes, with attached one -car garages. These units are two floors and approximately 1,040 square feet. • 2 two - bedroom, two -bath condominiums, with attached one -car garages. These units are one floor and approximately 1,160 square feet. • 4 three - bedroom, two -bath condominiums, with attached one -car garages. These units are three floors and approximately 1,430 square feet. Even though some units are townhome style (two story) all are part of a single condominium project. The Eagle River Water and Sanitation District either owns and rents out or has first right of refusal on 11 units. These units have had roof problems with some owners taking out second mortgages for repair. They have little to no noise exposure from 1 -70. Red Sandstone is located about three - tenths of a mile north of the North Frontage Road, nestled among the hills. A creek runs along the west side of the units. Brookstone Condominiums are on the other side of the creek, which appear to be a mix of local and second homeowner occupied units. The units are separated on the east side from the primarily residential and recreation - access Red Sandstone Road by a berm. Units face east /west, with good sun exposure. Views of mountains are available to the south, whereas north and west views are of the surrounding hills and east views include the river valley, Brookstone Condominiums and hills. Public transportation is available via the Sandstone Purple transit line and stops about two - tenths of a mile from the site. A pedestrian bridge is available within one mile of the units, which crosses over 1 -70 Rees Consulting, Inc. 5/20/2014 34 Draft 4 -3 -14 into the Vail town center. The nearest grocery and other resident services are located within the City Market shopping center, about 1.6 miles from the development along the North Frontage Road. The development itself has limited shared outdoor space. Hiking is available on the hillsides near the development. From 2010 through March 2014, turnover was high at Red Sandstone when 12 of the 18 units sold. This equates to an average annual turnover rate of nearly 16 %. The prices for these units were as follows: Price Range Price Range 1 BR $168,000 - $177,900 2 BR $174,200 - $213,500 3 BR $235,000 - $249,000 Source: County Assessor records Vail Commons Average Price Average PPSF $172,950 $167 $200,217 $193 $239,975 $197 A complex with 53 for -sale and 18 rental units completed in 1997. The for -sale units are comprised of: • 24 two - bedroom condominiums located in three buildings, including either one - and -a -half baths or two - baths, each with a large exterior storage closet and a shared garage under every building. These units are one floor and approximately 992 square feet. • 13 two - bedroom, two -bath townhomes located in two buildings, no covered parking. These units are two floors and approximately 1,018 square feet. • 6 three - bedroom, two -bath townhomes located in two buildings, all with one -car attached garages. These units are two floors, were built with an unfinished basement and are approximately 1,800 square feet. • 10 three - bedroom, two -bath townhomes located in three buildings, all with two -car attached garages. These units are two floors, were built with an unfinished basement and are approximately 1,850 square feet. Units are located between the North Frontage Road and Chamonix Lane, just east of the City Market in Vail. Groceries and other services (restaurants, postal, hardware, shopping, vision care, etc.) are within easy walking distance of the 1� 1 complex and a day care center is located within the development. Transit stops are located within 3 % mile of the development. Units primarily face either north /south or east /west. Units located adjacent to the frontage road receive the most highway noise, although I -70 noise is present throughout the development. Views of mountains are available in all directions, with units located along the perimeter of the development having the best access to views. Rees Consulting, Inc. 5/20/2014 35 Draft 4 -3 -14 Open space within the development is of limited usability, primarily providing interior pedestrian pathways and property drainage. Hiking is available on the hillsides to the immediate north of the development. Of the 53 ownership units at Vail Commons, eight sold between 2010 and March 2004, a far lower turnover rate of 3.5% per year than at Red Sandstone. The prices for these eight units were as follows: Price Range Price Range 2 BR $155,400 - $176,700 3 BR $250,300 Average Price Average PPSF Other Deed Restricted Ownership Units in Eagle County $166,814 $172 $250,300 $132 There are nearly 650 deed restricted condos, townhomes, duplexes and single - family homes down valley from Vail in Eagle County (apartments and units in the Roaring Fork Valley not included). Deed restrictions vary widely from those with employment, income and resale limitations to ones only requiring that preference be given to Eagle County employees for a defined time when listed for sale. Down Valley Deed Restricted Ownership Housing Project Location # Deed /Covenant Restricted Units Brett Ranch Edwards 156 Multiple Sites* Avon 64 Eagle Ranch Eagle 43 Miller Ranch Edwards 282 Red Draw Condos Edwards 16 Riverwalk Edwards 59 Stratton Flats Gypsum 26 Total 646 *Larger projects include the Sheridan, Chapel Square, Wildwood Townhomes and Grandview. • With 282 units, Miller Ranch in Edwards is by far the largest deed restricted development in Eagle County. Completed in 2006, it offers 69 single family homes, 64 duplexes, 49 townhomes and 100 condominiums. Features that make this development particularly attractive include walking distance to schools, ample parks /green space and neighborhood design. Deed restrictions limit price appreciation and occupancy to county residents who are employed, earn Rees Consulting, Inc. 5/20/2014 36 Draft 4 -3 -14 at least 75% of their income within the county and are qualified for the Valley Home Store's Master Buyers List. • Red Draw Condominiums is a 16 -unit development in Edwards next to the St. Claire of Assisi Church has both local employment occupancy and resale price restrictions. The two - bedroom /two- bathroom units initially sold for $263,600. • Riverwalk Condominiums in downtown Edwards has restrictions that limit sale to Riverwalk then Eagle County employees for 90 days before anyone can purchase. • Brett Ranch in Edwards has covenants that impose a 1% transfer fee on sales to households that do not include Eagle County employees or that own another residential property. • Stratton Flats in Gypsum is a single family home development offering three and four bedroom homes with two -car garages starting around $240,000. Of the total of 339 units at build out, six were built under deed restrictions that limit price and occupancy. A modified deed restriction limiting occupancy to Eagle County employees has been applied to about 20 units. These units have sold for market prices with a small incentive (1% - 1.5 %) for closing costs. The deed restricted housing inventory in Avon includes 64 units scattered through the community in nine developments (apartment project excluded). Most units have occupancy restrictions (employment 30+ hours per week in Eagle County and incomes no greater than 120% AMI) and limits on capital improvements and resale prices. Of the 64 units, 13 are still owned by their developers and rented to employees. There is little turnover among the units. Amenities /Design Features Interviews of staff involved in managing /selling deed restricted housing as well as realtors revealed consistent opinions about the features most desired by local homebuyers. They are: 1. Storage — Mountain residents have lots of gear and recreational equipment. Plus outdoor furniture and grills must often be moved into storage in the winter so as not to impede snow removal. In -unit spaces, exterior storage lockers and extra space in garages have all worked well. Garages /Parking — Parking is very tight throughout most of Vail. While residents often take a bus, walk or bike to work, they have cars for other errands and travel. With a harsh winter climate, garages are highly desired for parking as well as storage. It does not appear that there are strong preferences for private attached garages over common garages with storage lockers and or detached private garages. Parking for guests is crucial but access should be limited so that day skiers do not park at Chamonix due to its proximity to a bus stop. 3. Outdoor Space — Common outdoor areas should be functional, large enough and designed so that it can be used for more than open /green space. It should be sunny. Grills, tables, seating, space for a garden, a play area for children, and a play area for dogs would all be appealing. Small private fenced outdoor areas for children and /or dogs is highly desired by many. Rees Consulting, Inc. 5/20/2014 37 Draft 4 -3 -14 4. Access to Sunlight and Views — Vail is known for having limited access to the sun in the winter. More sunlight has been cited by buyers of down valley housing as a reason for not considering Vail. Fortunately for the Chamonix site, access to one will provide access to the other — south facing units get the most sun and the best views are to the south. North facing walkways, front doors and garages entrances can be problematic. Positioning all units so that each has a south facing wall would be ideal. 5. An Extra Bedroom —While many of the owners now living in Vail's deed restricted housing and many of the potential buyers are single they want the opportunity to rent to a roommate even if only seasonally. Also, residents of resort communities tend to have a lot of company during peak winter and summer periods. Most want one more bedroom than they absolutely need. 6. Energy Efficient Heating System — Utilities can be very expensive in Vail. Heating systems are typically used nine months per year and occasionally even in the summer months. New, energy efficient systems, especially in floor heat, would be very appealing when compared to the systems in the older residential units in Vail and would keep heating bills comparatively low. 7. Convenient Access to Bus Stop — Sidewalks and internal walkways should be designed so as to make it easy to travel, wearing ski boots, from units to the bus stop. 8. Mud Room — Since Vail's residents have many boots, coats, hats and gear, a "mud" room /entryway is far more functional and appealing than a coat closet. Designs that provide an air lock /doorway between the entry and main living area would also improve energy efficiency. 9. A Second Bathroom — Whether for use by a roommate, family member or guest, most buyers seek two bathrooms. Other design features that should be a given but that have been overlooked in the past include: • Outdoor spigots —the lack of them has been a problem at Miller Ranch; • Roofs that last given snow loads without features that create ice dams and cause leaking; and • Snow shed /snow storage. Rees Consulting, Inc. 5/20/2014 38 Draft 4 -3 -14 VII. Demand Estimates This section quantifies the size of the market and the capture rates for the proposed units taking into consideration the number of households residing within the market area by income and household size, in migration of households from outside the market area, and projected growth in households. Market Segmentation To estimate the potential size of the market for the proposed Chamonix homes, the profile of buyers is analyzed to segment those who qualify and are most likely to qualify. From Where The potential market for deed restricted homes in Vail primarily consists of persons who already live in or near Vail. Very little movement up valley of families from Eagle and Gypsum should be expected although interest would likely be higher among some now living in Edwards. Results from a 2007 household survey in Eagle County showed there is not strong interest in moving from mid valley and down valley communities to Vail. Of the residents who indicated Vail was their first choice in which to live, 65% already lived within the community, 4% lived in the unincorporated area adjacent to Vail, 6% lived in Eagle -Vail, 4% in Minturn and 4% in Avon. Only 8% lived in Edwards and 3% in the Eagle area. Preference to Live in Vail Where Now Live Want to Live in Vail Edwards 8% Eagle /Brush Creek 3% Gypsum /Gypsum Creek 3% Vail- Incorporated 65% Avo n 4 Basalt/El Jebel /Frying Pan 1% Minturn /Redcliffe 4% Eagle -Vail 6% Other 1% Vail- Unincorporated 4% Wolcott /Bellyache Ridge 1% 100 Source: 2007 Eagle County Housing Needs Assessment Respondents to the 2007 survey were also asked whether they wanted to buy or rent a different residence and which community they preferred. Results showed that: Rees Consulting, Inc. 5/20/2014 39 Draft 4 -3 -14 Edwards was the number one choice of where residents looking to buy most want to live followed by the Eagle /Brush Creek area; and Vail was third overall with nearly 15% of those surveyed indicating it was their first choice. There has been a fundamental shift in location preferences. According to the 1999 Eagle County Housing Needs Assessment survey, Vail had the highest ranking of where Eagle County's residents most wanted to live (22 %) followed by the Edwards area at 20% and Eagle at 12 %. The mix of applicants for the Arosa duplex lottery supports the 2007 survey findings. Of the 11 applicants, nine were living in Vail or Eagle -Vail at the time of application and two were living in Edwards, indicating that housing in Vail will primarily attract persons who already live in or near Vail. Arosa Duplex Lottery Applicants Household Type Where they lived @ application Priority Purchasers Couple with child Vail Commons Couple with child Eagle -Vail Townhouse Couple with 2 children East Vail Couple with child Eagle -Vail Townhouse Couple with child West Vail Single with 2 children Edwards Non - Priority Purchasers Couple no children Red Sandstone Couple no children Vail Commons Single Vail Commons Couple no children West Vail Single with 1 child Edwards There is less correlation between job location and where residents most want to live than might be presumed. According to the 2007 survey, about 40% of employees working in Vail indicated their first choice of location to live is Vail. Length of Residency Most buyers of deed restricted properties are long -time residents. Very few buyers will be new to the area. Although not tracked, the typical applicant for Vail's lotteries has lived in Vail for about 10 years. Of the 31 buyers of Miller Ranch homes in 2013, only one was moving in from outside of the county. The 2007 Housing Needs Assessment survey found that only 2% of homeowners in the county had lived there for less than one year. Most (69 %) had lived in the county for 10 or more years. First Time or Move -Up /Move -Down • The majority of Chamonix purchasers will be first -time homebuyers, probably 75% or more based on historical sales. Rees Consulting, Inc. 5/20/2014 40 Draft 4 -3 -14 • Some will be moving within the deed restricted system, either moving up as families grow or, as has been increasingly the case, buying two residences to replace one in the event of divorce. • There have been a few cases where buyers have sold free market homes down valley and purchased deed restricted housing in Edwards. The extent to which this is likely to happen at Chamonix is hard to judge, but the possibility may increase as the free market appreciates over time. Household Composition Compared with Eagle County households overall, residents who indicated Vail was their first choice of where to live in the 2007 survey were more likely to live alone or with roommates than were residents who preferred to live down valley. Approximately 37% of the county's households overall compared with 25% of those who wanted to live in Vail included at least one child. Of the 79 fully deed restricted ownership units in Vail, 37 (or 47 %) are now occupied by singles without children. Families own about 42% of the units. The rest are owned by the Eagle River Water and Sanitation District or Mountain Valley Developmental Services and are rented. A couple lives in the only one bedroom unit that is owner occupied. Three of the 24 three - bedroom units are owned by a single individual without children; 16 are occupied by households with at least one child (typically one). Of the 53 two - bedroom units, 34 were purchased by singles. Rees Consulting, Inc. 5/20/2014 41 OVERALL Vail —1" Choice Couple with child(ren) 27% 20% Couple, no child(ren) 27% 25% Adult living alone 23% 31% Unrelated roommates 10% 17% Single parent with child(ren) 8% 4% Family members and unrelated roommates 3% 2% Immediate and extended family members 2% 1% Other 1% 100% 100% Source: 2007 Housing Needs Assessment Survey Of the 79 fully deed restricted ownership units in Vail, 37 (or 47 %) are now occupied by singles without children. Families own about 42% of the units. The rest are owned by the Eagle River Water and Sanitation District or Mountain Valley Developmental Services and are rented. A couple lives in the only one bedroom unit that is owner occupied. Three of the 24 three - bedroom units are owned by a single individual without children; 16 are occupied by households with at least one child (typically one). Of the 53 two - bedroom units, 34 were purchased by singles. Rees Consulting, Inc. 5/20/2014 41 Draft 4 -3 -14 Household Composition — Owners of Vail Deed Restricted Units Single Single w/ Couple Couple w/ Other Total Child(ren) Child(ren) Units Vail Commons 2 BR 25 2 10 37 3 BR 3 3 1 8 1 16 Red Sandstone 1 BR 1 1 2 2 BR 6 1 5 12 3 BR 1 1 2 4 North Trail Townhomes 2 BR 3 1 4 3 BR 2 2 Arosa Duplex 3 BR 2 2 Total 37 7 14 12 9 79 Percent of Total 46.8% 8.9% 17.7% 15.2% 11.4% 100% There are distinct differences between buyers interested in Edwards and those who prefer to live in Eagle or Gypsum. Edwards attracts singles as well as families, appeals to those who work mid valley or who commute in both directions, works well for residents who like to ski often, is attractive to households that prefer greater diversity in the community and are interested in higher density multifamily housing. Market Size Approximately 3,100 renters reside in the area that includes Vail, Eagle -Vail and Avon. This area should be considered the primary market area for the proposed Chamonix development since: • Past surveys have shown in interest in living in Vail is highest among existing residents; and • Lottery applicants and buyers of deed restricted housing in Vail lived in or near Vail at the time of application. Of these 3,100 renter households, roughly 1,600 households have incomes within the ranges specified by the Chamonix Master Plan (60% AMI to 140% AMI). How the proposed units are ultimately priced will impact the extent to which they are actually affordable for the wide range of targeted households. Rees Consulting, Inc. 5/20/2014 42 Draft 4 -3 -14 Market Area Renter Households by Income and Size, 2013 Income Range 1- Person 2- Person 3- Person 4- Person 5 +- Person Total 60% AM $36,540 $41,760 $46,980 $52,140 $56,340 N/A 140% AM $85,260 $97,440 $109,620 $121,660 $131,460 $0- 10,000 211 69 6 16 0 302 $10,000 - 20,000 189 23 115 9 10 346 $20,000- 30,000 32 157 68 99 13 369 $30,000- 40,000 83 46 107 22 148 406 $40,000- 50,000 123 174 43 32 2 374 $50,000- 60,000 132 171 94 21 11 429 $60,000- 75,000 97 126 37 54 67 381 $75,000- 100,000 15 166 37 97 9 324 $100,000- 125,000 16 30 36 9 7 98 $125,000- 150,000 4 2 9 9 0 24 $150,000 - 200,000 11 32 10 0 0 53 $200,000+ 6 1 1 0 0 8 Total 919 997 563 368 267 3,114 Within Targeted Income Ranges 450 637 247 181 94 1,609 by Household Size 28.0% 39.6% 15.4% 11.2% 5.8% 100.0% Source: Ribbon Demographics data and Rees Consulting calculations Demand Estimate There is total potential demand for approximately 1,850 ownership units in Vail generated by households with incomes in the ranges targeted by the Chamonix Master Plan. The proposed 58 units would need to capture 3.1% of this demand, which is a low capture rate. Demand and Capture Rate Calculation # Households Market Area Renter Households 3,100 In Targeted Income Ranges 1,600 Growth within 2 Years (2% per year) 65 Total Up Valley Market 1,665 In Migration (from down valley or out of county) 10% Total Demand 1,850 Capture Rate (58 units proposed) 3.1% This estimate of potential demand includes households that may not want to buy or may not be able to buy because they cannot qualify for a mortgage; however, with a conservative capture rate of only 3.1 %, it appears that demand is more than adequate for the proposed units. Rees Consulting, Inc. 5/20/2014 43 Draft 4 -3 -14 While four of the 11 applicants for the Arosa lottery were seeking to move up from existing deed restricted housing within Vail (Vail Commons and Red Sandstone), the vacated units will need to be sold; therefore, demand from existing owners has not been considered in this calculation. Lottery/ Buyer Applicants Information on lottery /homebuyer applicants is provided for additional insight into demand. The Valley Home Store maintains a Master Buyers List with approximately 100 applicants currently who are pre - qualified under both Eagle County's Guidelines and for a mortgage. Of these applicants, roughly 20% include a member who works full time in Vail. At least some of the applicants on the list are potential buyers for Chamonix. The Town of Vail has had an average of 8.4 applicants over the past five years for its annual lottery (between 13 and three applicants each year). This lottery has been for resales; a separate lottery was held for the Arosa duplex units. No other new units were completed during this period. Lottery fatigue and perceptions that there was nothing available may have resulted in fewer households participating in the lottery than were interested in purchasing housing. Rees Consulting, Inc. 5/20/2014 44 Draft 4 -3 -14 VIII. Mortgage Availability Obtaining home mortgages has been more difficult since the recession due to the imposition of stricter lending standards. Further, mortgage availability is complicated by deed restrictions, leased land and condominium ownership. Through interviews of mortgage lenders, this section of the report examines how mortgage availability, deed restrictions /complications and interest rates affect the ability for households to purchase and afford homes. Loan Products Mortgage lenders provide a full array of loan products for deed restricted housing in Eagle County, including: • Conventional mortgages sold on the secondary market most often under Fannie Mae guidelines; • Portfolio loans held by the originating lenders and underwritten based on in -house criteria. These are most often 5- or 7 -year adjustable rate mortgages (ARM'S), but at least one lender can offer 30 -year fixed rates; and Government insured or guaranteed loans for 15- or 30 -year fixed rate mortgages — USDA for which no down payment is required and FHA that requires about 3.5% down. None of the lenders interviewed are now processing VA loans for deed restricted housing due at least in part to their understanding that VA requires deed restrictions to have income caps, which is typically not the case in Vail or Eagle County. Not all lenders provide all these loan products. Some provide only portfolio loans on deed restricted homes, while others also offer conventional and possibly government loans. Deed Restriction Limitations Deed restrictions must be approved by lenders. There are generally two approaches: In house approvals by larger lenders with the restrictions submitted for each individual loan application. This is the way it has typically been done in Eagle County. The requirements vary somewhat by lender. Project approval by Fannie Mae and /or FHA that would then allow any lender to originate conventional /secondary market mortgages for units within the development. The application process can be time consuming. Fannie Mae requires an application fee, and the approval is in effect for only two years. Lenders often apply their own unique limitations or "overlays" on top of Fannie Mae /USDA /FHA criteria. While underwriting guidelines vary, the following requirements are typical: Rees Consulting, Inc. 5/20/2014 45 Draft 4 -3 -14 • The deed restriction must terminate at foreclosure or deed in lieu of foreclosure. Fannie Mae no longer imposes this requirement, but lenders in Eagle County have not yet dealt with restrictions that survive foreclosure; • The appraisal has to include three comparables with similar deed restrictions; • The lender is not required to send notices of foreclosure to third parties, including the Town or other entities that might have an interest in preservation of the deed restriction; • Right of first refusal will only be granted to the entity that applied the deed restriction and the time period for acting on the right cannot exceed 90 days; • Resale controls must have a fixed period of time; and • The deed restriction must be in a public record identifiable through a routine title search. Lending on Condominiums Mortgage lending on condominiums is more complex and time consuming than for townhomes, duplexes and single - family homes for which the underlying land is subdivided. Several requirements are typically imposed that limit loans for condominiums, including having too many renter - occupied units in the complex, too many units owned by one party (as is the case at Red Sandstone where the Eagle River Water and Sanitation District owns seven units) and mixed /commercial uses on site. At least one local lender will not provide any long -term, fixed rate loans on condos at this point in time. A limit on the number of loans that can be made by a mortgage company on any one project is also common to limit their exposure (usually calculated as a percentage of total units in the development). The interest rate for mortgages on condominiums may also be higher or require more points. The condominium approval process can be intertwined with deed restriction approval procedures. Since FHA no longer allows "spot" loans within condominium projects, FHA approval of the entire project is required. In Eagle County Few projects (maybe only one) have current FHA approvals in place. None of the deed restricted housing in Vail is FHA approved or has a Fannie Mae master project approval. Leased Land Mortgage lenders typically accept land leases provided that the term extends beyond the term of the loan by a specified number of years. While leases complicate the mortgage application since underwriters must review and approve the lease with every application, they do not significantly limit the types of loans available. ARM's While most borrowers prefer loans where their payment is fixed for typically 15 or 30 years, most of the buyers of deed restricted units in Vail have obtained 5 or 7 year ARM's amortized over 30 years with a five point maximum lifetime increase in the interest rate. The initial interest rate on ARM's has been very low in recent years — below 3 %, and the annual adjustments have not been to the maximums allowed since fixed rates have been held low by Federal Reserve polices for a relatively long time. In other words, ARMS have provided the lowest, most affordable payments possible and have been stable in recent years. Rees Consulting, Inc. 5/20/2014 46 Draft 4 -3 -14 Interest rates are going to rise, however. Fixed rates have increased one percentage point since last year. Mortgage lenders generally feel that rates will remain mostly stable through this year but will increase starting next year as the Federal Reserve backs down from its economic stimulus efforts. The Impacts of Interest Rates on Affordability Interest rates have a profound impact on housing affordability. For every 1/4 point difference that rates rise between 4.5% (about the current average for a 30 -year fixed rate mortgage) and 5.5 %, a buyer's borrowing capacity decreases by nearly 3 %. A one point increase in the rate, as occurred in 2013, would drop the affordable purchase price for a household with an income of around 80% AMI by $20,000 to $25,000. According to a recent quote, the interest rate on ARMS is about 3% for 5 years and 3.5% for 7 years. The monthly payment for a $250,000 ARM at 3.5% with a 5 point lifetime cap could increase 73% during a period of rising interest rates, from less than $1,100 to nearly $1,900 in five to seven years. Interest Rate Comparison for Adjustable Rate Mortgages Starting Rate Maximum Rate Loan Amount $250,000 $250,000 Interest rate 3.25% 8.25% Monthly Payment (principal & interest) $1,088 $1,878 Down Payment Assistance Eagle County's down payment program was adjusted in recent years to limit the amount provided to no more than 3.5% of the purchase price. The program has not been utilized much since this change, however. The availability of funds is currently good. The program is ideal for use with FHA mortgages; however, the fact that few deed restricted projects are approved by FHA is likely reducing its utilization. Borrower Profile Most of the applicants for mortgages on deed restricted units are first time buyers. They tend to be young singles or families, though there seems to be an increase in middle aged borrowers. Many have credit issues. One lender indicated about 70% can eventually qualify while 30% cannot. Since the recession, credit problems have become more frequent. Very few have a 20% down payment and thus must obtain a government loan or pay for private mortgage insurance. At Miller Ranch, which is the largest of the deed restricted properties and has had the highest number of sales, between 30% and 50% of buyers have obtained USDA mortgages, which allow loans up to 102% of price or appraised value in order to cover the program's up -front costs. Rees Consulting, Inc. 5/20/2014 47 Draft 4 -3 -14 IX. Conclusions and Recommendations Market conditions appear to be prime now for proceeding with the development of Chamonix. The availability of housing affordable for households with incomes between 60% and 140% AMI to purchase is small while potential demand appears to be more than sufficient for the absorption of 53 additional homes. Specifically: • The economy is recovering with growth in jobs and significant reductions in unemployment. Projections call for continuation of this trend and population growth of 2% to 2.9% per year through 2020. • The housing market is rebounding. The number and choice of free market homes for sale down valley has decreased and prices are starting to rise. Bargains have disappeared and the number of foreclosures and bank sales has dropped sharply. • The deed restricted units currently in Vail have performed well. All units that have been listed for sale have sold, commanding the maximum allowable price appreciation. • The inventory of deed restricted units available for sale down valley has largely disappeared. There are five listings currently, all of which have been placed on the market this year. All units listed for sale in 2013 were sold or removed from the market by the end of 2013. • Rental availability is becoming increasingly limited and rents are rising; current average market rents are within the range that it would cost to purchase a Chamonix home at the targeted incomes. • Demand for deed restricted ownership opportunities is increasing with a record number of sales at Miller Ranch last year, an increase in lottery applicants (both Town of Vail and the Valley Home Store), and approximately 100 pre - qualified applicants on the County's Master Buyers List. Knowledge that the housing market has bottomed out and that prices are starting to rise, combined with concerns about interest rate increases, are spurring residents to buy. • Potential demand from households that are most likely to buy at Chamonix (i.e., households that now rent in or near Vail, have incomes in the 60% to 140% AMI range, and have from one to five members) appears be to be adequate for the proposed units with a low required capture rate of less than 4 %. To be responsive to demand and competition with limited but nonetheless attractive choices, some modifications to the existing development plan are recommended. These include some revisions to Master Plan concepts (unit mix and size) and additional recommendations for pricing, amenities /design features, marketing and mortgage options to enhance marketability of the proposed homes. Rees Consulting, Inc. 5/20/2014 48 Draft 4 -3 -14 Competition From within Vail Competition from within Vail is very limited. Of the units listed for sale under $500,000, only three condominium units and one townhome could be considered comparable to the proposed Chamonix units in terms of their suitability for year -round workforce households. While they offer a choice for households that might consider Chamonix, they are 42 to 48 years old and have no garages, outdated /inefficient heating systems, and HOA dues that are likely higher than will be charged at Chamonix. The one with an EHU restriction in place has been on the market for about one year. Interest in the unrestricted units has been higher, in part due to developers wanting to buy units to satisfy their employee housing requirements. Their price range from $432,500 to $495,000 sets an upper limit for Chamonix. Only two units in Vail with full deed restrictions as envisioned for Chamonix are listed for sale or soon will be, with maximum allowable prices of $212,544 and $236,248. The competition that Chamonix will create for current owners who desire to sell their deed restricted homes should be a concern only if the new units are priced lower than existing units. From Down Valley A total of 78 units down valley from Vail were listed for sale through the MILS in early April at prices less than $500,000. Prices per square foot were far lower than in Vail and decreased the farther down valley the units were located (527 in Vail, $308 in Edwards, $212 in Eagle and $193 in Gypsum). The free market is not generating significant competition in Edwards — only a few condominiums and townhomes were in this price range. A couple of small single family homes were listed for sale in Eagle for less than $400,000, but Gypsum is the only community were buyers can choose among new single family homes in the $300,000 to $500,000 range. The competition generated by homes in Gypsum and, to a smaller degree, Eagle for families with children should decline as the market continues its recovery. Regardless, the distance and the difference between Vail and Gypsum is so great, that attempting to set prices for Chamonix based on prices in Gypsum is not necessary — direct competition with these units will be limited. The deed restricted homes down valley, particularly in Edwards, provide attractive alternatives to purchasing at Chamonix. The neighborhoods like Miller Ranch, Eagle Ranch and Stratton Flats are attractive, well designed, near schools and parks and convenient to manyjobs. They offer single family homes, which Chamonix will not provide. Yet availability is now low and no new deed restricted developments are currently planned. Five deed restricted homes were listed for sale in Edwards and Eagle through the Valley Home Store as of late April, with list prices that ranged from $183,000 for a condominium to $390,000 for a single family home at Miller Ranch. Miller Ranch will pose the greatest competition since it has so many units (282), has K -12 schools within a short walk, is a much shorter commute for employees working in the Vail area than Eagle or Gypsum, offers a variety of unit types (15 different models ranging from condominiums to single family), offers a wide range of pricing and is in Edwards, which appeals to singles as well as families. While the Chamonix site is suitable for housing, the proximity to commercial uses and the lack of schools and parks within Rees Consulting, Inc. 5/20/2014 49 Draft 4 -3 -14 walking distance make it less desirable for families with children. The pricing and value of homes at Miller Ranch should be considered when designing and setting prices for Chamonix. Family Orientation Approximately 20% to 30% of the buyers at Chamonix will have children. Expectations that Chamonix will primarily target families is counter to experience among other properties, demographic trends and resident preferences. Specifically: • 25% of the county's households that prefer to live in Vail include at least one child. • 24% of the deed restricted units in Vail are occupied by households with at least one child. • 32% of the renter households with incomes in the targeted income range have three or more members, but this figure includes roommate households; 28% live alone and 40% are two- person households. These statistics reflect what all of the key informants interviewed as part of this study relayed - households with school age children have housing options down valley that better meet their family's needs and preferences. Few families have moved back to Vail when three - bedroom homes have become available; the large majority of applicants for those homes lived in or near Vail. Chamonix will be ideal for couples, however, who plan to have children. Over time, the number of households with children living at Chamonix will probably increase. Income Targets and Pricing The Master Plan target of 60% AMI to 140% AMI is a wide range to serve in one 58 -unit development. Prices that are affordable for 60% AMI households would be much lower than what a household earning 140% AMI could afford and would likely pay for a larger /higher quality home. In 2014 figures, the income range would extend from less than $40,000 to over $120,000. Serving this entire range will necessitate a wage range of prices, from about $135,000 to just over $450,000. At the upper end, pricing units at the 140% AMI level is not recommended for several reasons: • Single family homes are available in Edwards at Miller Ranch for less ($350,000 - $390,000). Historically, deed restricted housing in Vail has been priced at similar or lower levels than at Miller Ranch. • The market is providing housing in this price range in Vail. While only four units were listed in early April for less than $500,000 that are well suited for ownership by year round residents, buyers generally expect deed restricted units to be priced below the free market. There are relatively few renter households residing within the Vail /up- valley area that have incomes at and above 140% AMI. The income distribution shows a drop in households between 100% and 120% depending upon household size. Of the relatively few with incomes above $140% AMI, most are two - person households and many of them are likely roommate households. Rees Consulting, Inc. 5/20/2014 50 Draft 4 -3 -14 While some households may want to move up from existing deed restricted homes in Vail, the incomes of these households are not known and the step up would large in terms of price. For example, the last two - bedroom unit at Vail Commons to sell was priced just over $250,000. To purchase a three - bedroom home priced around $450,000 for 140% AMI households would result in a significant increase in the monthly payment. Unless research on existing residents of Vail's deed restricted homes documents move up desire and capacity, Chamonix pricing should not extend to the 140% AMI level. At the lower end, developing units for households with incomes as low as 60% AMI (roughly $135,000 to $175,000) will require substantial subsidies. It will also likely be more challenging for households at this income level to obtain mortgages. There are a significant number of renters with incomes in the 60% to 80% AMI range, but there are more with incomes between 80% and 100% AMI. It is therefore recommended that prices at Chamonix: • Be primarily affordable for households in the 80% to 120% range. If sufficient subsidies are available, providing some units for 60% AMI households should be considered, but pricing as high as 140% AMI is not advised at this time. • Be set lower than at maximum affordable levels. For example, to serve households with incomes at 80% AMI, prices should be set at 75% AMI, or even lower during periods of rising interest rates. • Possibly be structured using income tiers. In other words, identical units could sell for different amounts. This pricing technique is common for deed restricted units where the restrictions impose income limits. This has not been the way that Vail's deed restrictions have been structured in the past. • Be set with the expectation that interest rates will rise. Unit Size, Type and Bedroom Mix To serve a variety of households with incomes in the 80% AMI to 120% AMI variety in unit type and size is recommended. Specifically: • The size range should be expanded. As proposed, units would range in size from 1,292 for two - bedroom flats to 1,632 square feet for three bedroom duplexes. These sizes are relatively large. o Two - bedroom flats could be as small as 800 to 900 square feet and still be very livable provided that garage /storage space is provided. o Townhomes could range from 1,200 to 1,400, perhaps smaller depending upon price. o Duplexes units would be attractive as currently envisioned (1,632 SF) but could be marketable at 1,300 to 1,400 square feet. Rees Consulting, Inc. 5/20/2014 51 Draft 4 -3 -14 Consideration should be given to reducing the number of condominiums and offering townhomes. Each unit could have a south facing wall, private garages might be feasible, mortgage availability /pricing would improve, the development would lend itself more readily to phasing, and it would allow for private outdoor space. • Provide variety within unit types, perhaps two or three models, so as to allow for a wider range of pricing, provide more choice for buyers and enhance marketability. • The bedroom mix could be adjusted to offer slightly fewer three - bedroom units. Existing deed restricted properties already disproportionately accommodates families with about 30% of units (not counting EHU's) having three bedrooms. As now proposed, 38% of the Chamonix units will have three bedrooms. Mortgage Availability Mortgage availability for the proposed Chamonix units will be complicated by: • Deed restrictions limiting purchase to eligible households; • Building at least some of the units as condominiums; and • Developing the project on land leased from the Town of Vail. With interest rates on the rise, the availability of 30 -year, fixed rate mortgages will become more important to the marketability of deed restricted housing. Although most of Vail's buyers have been willing to obtain ARMS in the past, more borrowers prefer a 30 -year fixed rate and, with rate increases, will insist upon it. Furthermore, limitations on mortgage availability will negatively impact Chamonix's competiveness relative to Miller Ranch, where about half of the buyers in recent years have obtained USDA loans with the lowest fixed rates available and no down payment. To increase the type of mortgages available and the lowest /most competitive interest rates for borrowers: • Consider redesign of the proposed flats and lofts so that all or at least some of the units are townhomes rather than condominiums. • Work with local lenders to obtain approval of the deed restrictions and land leases so that both conventional, government (USDA, FHA and VA) and portfolio loan products are available. • Explore obtaining Fannie Mae and FHA direct approval of the project. • Divide the development into multiple HOA's so that the duplex units and townhome units, if built, are not subject to the same limitations and rates as condominium units. • Provide a lender referral packet to applicants that describes the various loan projects each lender offers and compares fixed to adjustable rate alternatives. Rees Consulting, Inc. 5/20/2014 52 Draft 4 -3 -14 Marketing Vail's once a year lottery system has worked adequately for resales and project- specific lotteries have generated sufficient buyers in the past. Chamonix will be the largest deed restricted development built to date in Vail, however. Given this, the following steps are recommended to enhance sales: • Provide a more flexible sale system than a single project lottery. • Pre -sell to allow for interior finish choices. • Work with the Valley Home Store to access their Master Buyers List. Amenities /Design Features To enhance the livability and competitiveness of the Chamonix homes, the following should be provided: • Garages, space for parking at least two cars per unit and adequate guest parking; • Additional storage suitable for bikes, skis and other recreational gear; • Small fenced outdoor areas for small children and dogs; • Functional common outdoor areas; • Access to sunlight and views (each unit should ideally have some south facing exposure); • A mud room; • Adequate sound proofing from 1 -70 noise; • A landscaped buffer between the site and the adjacent commercial uses; • Energy efficiency; and • Convenient pedestrian access to the bus stop. It is important to make the outdoor areas at Chamonix functional for more than open /green space. The semi - private areas between the duplexes should be fenced. The green areas on either ends of the parcel should be developed for use, perhaps a dog park and a playground. The areas between the row of duplexes and multifamily units to the south should be usable yet not too noisy. Phasing If the recommendations provided herein are followed with variety in unit type, size, pricing and mortgage availability in combination with well- designed units, desirable amenities and a flexible marketing system, phasing will likely not be necessary. Applications and presales could be used to test the validity of this conclusion, with adjustments made if it appears that the length of time for the units to sell will exceed the Town's ability to retain ownership of units after their completion. Construction phasing would be inconvenient and disruptive to initial buyers, would be more costly in the long run and would be difficult for condominium units. Rees Consulting, Inc. 5/20/2014 53 Draft 4 -3 -14 Appendix Change in Renter Households: 2000 - 2010 Source: 2000 and 2010 US Census Renter Household Composition by Area, 2010 # Renter Households 1,340 3,336 6,893 2000 # renter - households 1,032 2,917 5,499 renter - households 47.7% 48.0% 36.3% 2010 # renter - households 1,340 3,336 6,893 renter - households 51.5% 49.3% 35.8% Change in renter households 29.8% 14.4% 25.4% # Change in renter households 308 419 1,394 Source: 2000 and 2010 US Census Renter Household Composition by Area, 2010 # Renter Households 1,340 3,336 6,893 Renter - Occupied 51.5% 49.7% 35.8% 30% 3- person 16% 18% Renter Households by Type 4- person 8% 12% Family, no children 11% 15% 18% Family, with children 8% 19% 29% Living alone 36% 29% 26% Non - family, roommates 45% 37% 27% 100% 100% 100% Source: 2010 US Census Renter Household Size by Area, 2010 Persons per Unit 1- person Vail 36% Up Valley 29% Eagle County 26% 2- person 37% 32% 30% 3- person 16% 18% 18% 4- person 8% 12% 14% 5+ person 2% 8% 13% Average size 2.04 2.45 2.68 Source: 2010 US Census Rees Consulting, Inc. 5/20/2014 54 TOWN Of vn' iL1 VAIL TOWN COUNCIL AGENDA MEMO MEETING DATE: May 20, 2014 ITEM /TOPIC: Adjournment (Estimated 8:00 p.m.) 5/20/2014